kagetsuenkanko co.,ltd. (E04607) Stock Price

Kagetsu-en Kanko is a company whose main business is public gaming-related operations. The company operates off-track betting facilities (satellites) dedicated to velodrome racing and manages ticket sales offices for various public gaming events. Public gaming refers to legally authorized gambling businesses such as velodrome racing, horse racing, auto racing, and boat racing. The company develops its business by receiving operational contracts for these facilities from local governments.

The company's primary customers are local governments and related organizations that host public gaming events. Its revenue structure is primarily based on commission income from ticket sales at contracted facilities. While public gaming has stable demand, the industry faces long-term market contraction concerns due to population decline and diversification of entertainment options.

The Kagetsu-en Kanko group consists of the parent company and one affiliated company, operating as a single business segment focused on public gaming-related operations. Matsuo Koumuten Co., Ltd. operates as an affiliated company handling construction work for the company's facilities, creating synergies within the group.

Kagetsu-en Kanko is advancing an innovative management strategy centered on digitalization to adapt to structural changes in the public gaming industry. The company has set maintaining and improving operating profit margin and ordinary profit margin as key performance indicators, aiming to transform into a higher-profitability business. In response to industry-wide challenges such as aging fans and the spread of internet betting, the company is working company-wide toward achieving dividend payments as soon as possible.

The company's top priority strategy is the introduction of a cashless betting system, the first of its kind in the industry. Using the "Clap System" developed by an internet betting site operator, the company has already converted two satellite locations into cashless betting venues. Additionally, at Satellite Yokohama, the introduction of a smartphone betting system aims to acquire new customers from the digital-native generation. This technological innovation enables the company to move away from traditional cash-based betting while achieving both improved convenience and operational efficiency.

In business expansion, the company is actively pursuing a multi-sport venue strategy. Satellite Yokohama began offering auto racing betting, and Satellite Toriiya began offering local horse racing betting, transforming from single-sport to multi-sport facilities. The company plans to promote multi-sport conversion at remaining satellites and is working to expand auto racing off-track betting ticket sales and attract JRA off-track betting facilities (J-PLACE). Through this diversification, the company aims to expand sales opportunities and stabilize its revenue base.

At Satellite Auto Racing Yokohama, the company's core business, a fundamental operational restructuring is underway. The company is advancing cost reduction through in-house management of betting-related operations including maintenance and partial return of leased areas, and has completed integration with headquarters. While acquiring major customers through the smartphone betting system, the company is also focusing on continuous operational improvements. Regarding other satellites owned by the company, management is reviewing operational structures from a profit-maximization perspective, strengthening the management foundation through improved asset efficiency.