Regulatory policy

Korea seen as biggest loser in China’s zero Covid policy, Macau wins

Policymakers and health officials in East Asian countries are cautiously optimistic that their tourism economies will recover in 2022. Casino operators in particular are hoping for a recovery in international travel, especially those who are located in jurisdictions that prohibit or severely restrict their local populations from gambling.

Andrew Klebanow
Andrew Klebanow

The world has reason to be optimistic despite the recent increase in Covid-19 infections caused by the Omicron variant. In many countries, vaccination rates have exceeded 80%, treatments continue to improve, and the attitudes of health officials have changed, becoming more accepting of the fact that the spread of the virus has moved from a pandemic period to an endemic phase. As international borders reopen, tourism will return and with it, a resumption of casino gambling by residents of neighboring countries.

The People’s Republic of China (PRC) and its Zero Covid policy are emerging as an obstacle to the resumption of regional international tourism. Recently seen on the world stage during the Winter Olympics in Beijing, the PRC and Macao have designed and implemented a health security system that closely monitors the movements of its citizens and possible interactions with people who may have been infected. At the slightest sign of an outbreak, authorities put in place quarantine procedures to limit the spread of the virus. Both the PRC and Macau have succeeded in reducing transmission of the virus. Neither should change this policy until the virus is eradicated.

China’s Zero Covid policy will continue to impact casinos across East Asia even after borders reopen. Facing a mandatory 14-28 day quarantine period upon returning from a foreign country, residents of the PRC and Macau are not expected to be part of the international travel mix for the foreseeable future. The question becomes, which gambling jurisdictions can survive and thrive without the return of Chinese players? A country-by-country review reveals that there will be winners, survivors and losers among casino jurisdictions in the region.


Prior to the pandemic, Cambodia’s tourism industry experienced robust growth thanks to visitors from the PRC; however, some jurisdictions in the kingdom were less dependent on Chinese visits than others. The Poipet gambling district, on the border with Thailand, depended on visitors from Bangkok for almost all of its gambling revenue. Similarly, Bavet casinos mainly served players from Vietnam, especially those residing in Ho Chi Minh City. No jurisdiction will be affected by the loss of Chinese tourists. Although vaccination warrants and proof of a negative test result may slow the cross-border process, both markets should recover once the borders fully reopen.

NagaWorld in Phnom Penh had previously enjoyed the benefits of growing tourist visits from the PRC. Nonetheless, the property has managed to post strong results over the past year and has demonstrated that its local database of expats residing in the city can support them. Going forward, a shift in their international marketing strategy that focuses on Thailand and Malaysia may replace any lost PRC business. With the opening of Naga2 and a complete overhaul of Naga1’s hosting product, the company now has the tools to attract the wealthiest players residing in Bangkok and Kuala Lumpur.

The only Cambodian market clearly vulnerable to China’s Zero Covid policy is Sihanoukville. Before the pandemic, this coastal community was a real boomtown, with condominiums and hotels rising along the city’s beaches. Built to serve Chinese visitors and second-home owners, the hotel, casino and second-home markets will struggle to regain the momentum they once enjoyed, and they will struggle to replace this loss in tourism demand. While the completion of a new four-lane highway to Phnom Penh will open the city up to weekend vacationers, the majority of those visitors will be Cambodian residents and as such banned from gambling in the city’s casinos. .


The gaming jurisdiction in Asia that is expected to suffer the most from the loss of Chinese tourism is South Korea and its seventeen foreign-only casinos. Casinos in Jeju, Busan, Incheon and Seoul all relied heavily on Chinese gamblers, as residents were and continue to be banned from gambling at these properties. Today, only three of Jeju’s eight casinos remain open, and the only business they have comes from the city’s expatriate population.

The central government’s insistence on relaxing regulations to allow even occasional visits by residents marks a continuing dark period for these casinos. There will come a time when the lack of meaningful gaming revenue will take its toll, as fixed expenses will completely deplete cash reserves. No business can survive without customers indefinitely, and Korea’s policy prohibiting its residents from playing in all but one casino in the country could mean the disappearance of several properties.


Vietnam offers a mix of border casinos that target Chinese gamblers along the country’s northern border, as well as resorts along the coast. The country also has a pilot program in place that allows residents to gamble, albeit in fairly remote resort destinations.

The Grand Ho Tram Resort on the central coast, two hours from Ho Chi Min City, had successfully repositioned itself from a casino-centric property to an integrated family resort even before the pandemic. With the recent opening of a new hotel tower aimed squarely at families, Ho Tram should see better results as international travel resumes.

The two resort casinos in and around Danang face a less optimistic outlook. The Crown International Casino Resort had long depended on Chinese junket gambling for the lion’s share of its gaming business. With the PRC’s focus on reducing junket activity coupled with its Zero Covid policy, it’s hard to see how this operation will replace its major Chinese customers. Similarly, the recently completed Hoiana integrated casino resort, a third of whose partners is Suncity Group, will no doubt struggle to replace both holidaymakers and Chinese gamblers, as the property has been developed with these segments in mind. Steps. A shift in marketing strategy focused on Koreans, particularly those with a propensity for golf and gambling, could replace some of its business, but the loss of Chinese customers will undoubtedly hurt.

The Philippines

Casinos in the Philippines, primarily the properties that make up Entertainment City, have long served the PRC’s premium players. Junket developers, specifically Suncity, were responsible for providing this valuable gaming segment to these properties. While Chinese junket customers made a significant contribution to gaming revenue, these casinos were not entirely dependent on this market.

As in other jurisdictions, a shift in marketing strategy that focuses on other countries can replace lost business from the PRC. More importantly, Entertainment City’s casinos have become gaming and entertainment destinations that primarily serve the local population. They don’t depend on Chinese players as much as they used to.


No other casino market will benefit more from the PRC’s Zero Covid policy than Macau. With the policy firmly in place for the foreseeable future, the only jurisdiction a Chinese citizen will be able to play without onerous quarantine restrictions upon returning will be Macau. Macau is, after all, in the PRC’s Zero Covid bubble, and its tracking app is integrated with one developed in the PRC. A visitor to the PRC can use their mobile device to confirm their vaccination status when crossing the border and as a tracking tool when entering one of the city’s casinos. In fact, Macau’s casinos are the real beneficiaries of the Zero Covid policy. Until the pandemic subsides, Macau will have the entire PRC gamer market all to itself, with no annoying foreign competitors to contend with. It’s not a bad prospect.

Andrew Klebanow is co-founder and principal advisor to C3 Gaming (Casino Consultants Consortium), the largest and most diverse group of independent gaming consultants. He can be reached at [email protected]