Kangwon Land's slot machine manufacturing business, launched in 2017, has posted losses for six consecutive years since 2020. The state-run casino operator opened a local office in the Philippines to develop overseas sales channels, but sales have been weak and staffing oversight has been lax, with a dispatched employee collecting overseas work allowances while remaining in South Korea.
According to data submitted by Kangwon Land to the office of Koo Ja-keun, a lawmaker of the People Power Party who sits on the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee, the slot machine manufacturing business lost 1.399 billion won starting in 2020 and accumulated losses of 14.806 billion won through 2025. The data was released on the 1st.
The company opened a local office in the Philippines in 2022 to expand revenue, but conditions did not improve. Despite investing about 700 million won in office rent and other costs from the office's opening through August this year, slot machine sales totaled 20 units in 2023, 42 units in 2024, zero in 2025 and six so far this year. Sales in the Philippines accounted for 88.31% of the company's global sales over the same period. There were no new distributors identified and no new contracts signed. Kangwon Land said it had focused on managing its existing distributor and conducting joint sales, because the Philippines is the exclusive territory of RGB, a Southeast Asian distributor.
Weaknesses also emerged in the management of dispatched staff. An employee sent to the Philippines in January 2024 spent 243 days of the assignment period in South Korea, citing domestic work duties and personal reasons. Overseas work allowances were nonetheless paid every month regardless of whether the employee was in the Philippines, totaling about 40 million won last year. Critics say the assignment was maintained even though long-term local work was not feasible, without appropriate steps such as reassigning the employee.
The local office also proved less cost-efficient. Kangwon Land's own review found that running the overseas office cost 62 million won more a year than having one employee make a monthly business trip to the country.
"We are spending more on the Philippines office than a business-trip arrangement would cost, yet sales are weak and there was not even a system to separately evaluate the office's own performance," Koo said. "We need to review the entire operating framework, starting with whether the overseas office is necessary at all, as well as the duty requirements and allowances for dispatched staff."
