Korea Casino Group Opposes 15% Tourism Levy and Licence Plan

The Korea Casino Association has urged South Korea’s government to withdraw proposed regulatory changes that would increase the maximum tourism fund contribution for foreigner-only casinos and introduce five-year licence renewals, warning that the measures could place further financial pressure on operators still recovering from the COVID-19 pandemic.

The Ministry of Culture, Sports and Tourism is considering raising the maximum contribution to the Tourism Promotion and Development Fund from 10% to 15%. The proposal also includes a five-year licence renewal system and prior approval requirements involving transfers or acquisitions of significant interests in casino companies.

The industry association argues that the levy creates a particular burden because casinos pay it according to revenue rather than profitability. The contribution currently operates on a progressive scale, with rates ranging from 1% to 10% depending on revenue.

“Unlike general levies that are imposed based on profit generation or income and corporate taxes, the casino industry is the only sector that pays to the fund based on ‘revenue’ even when operating at a loss. In fact, over the past decade, about half (8 to 15) of the 17 to 18 domestic casino operators have suffered from annual operating deficits.”

The association said raising the maximum rate would come alongside other financial obligations already imposed on operators.

It warned that increasing the levy from 10% to 15% “on top of the existing burden of paying individual consumption tax (2 to 4% of revenue), corporate tax,and local taxes, will hasten the bankruptcy of casino companies that are barely recovering from the aftermath of COVID-19 and are racing toward normalization.”

Association Questions Financial Impact of Higher Levy

Industry estimates indicate that the proposed increase could significantly raise annual payments by major casino operators.

The Korea Casino Association estimated that three large mainland operators could face approximately KRW76.3 billion in additional annual contributions. Including one operator in Jeju would raise the estimated increase to around KRW101.9 billion.

Industry analysts have separately warned that the changes could reduce profits by as much as 37% in 2026 and lead operators to scale back capital expenditure.

The association also rejected suggestions that the sector’s financial contribution to the tourism fund had remained effectively unchanged for three decades.

“The tourism fund is not a fixed-fee system. As casino operators’ revenues have grown, the amount they contribute has increased proportionally,” the industry body noted.

According to the association, casino operators have contributed a cumulative KRW5.23 trillion, equivalent to approximately US$3.53 billion, to the fund since 1994.

It also said the tourism fund collected KRW219.5 billion from casino operators in 2025, the highest annual amount recorded. That represented a 61.7% increase from KRW135.7 billion in 2019.

“Despite the [casino] industry’s substantial contribution to South Korea’s tourism sector, it is regrettable that it is still not treated as a key contributor to the tourism industry.”

Casino operators have also paid individual consumption tax since 2008. The rate ranges from 2% to 4% of revenue and can reach 5.2% when an additional “education tax” is included.

“It is inaccurate to claim that the industry’s financial burden has remained unchanged over the past 30 years,” the trade body said.

The ministry has offered a different assessment of the proposed contribution changes. It said revenue from foreigner-only casinos had increased 10.3-fold since the fund contribution system was introduced in 1995, while average revenue per operator had grown 7.8-fold.

The ministry also clarified that the proposed 15% rate would not apply across all casino revenue. Instead, the higher percentage would apply to a new revenue bracket for higher-sales properties, with the applicable threshold and final contribution structure still to be determined.

It rejected estimates that three major operators would automatically face approximately KRW90 billion in combined additional payments, saying such calculations assumed a broader application of the 15% rate than currently proposed.

Five-Year Licence Renewal Plan Draws Opposition

The Korea Casino Association has also challenged plans to replace the current licensing framework with renewable five-year permits.

Casino licences in South Korea have operated without fixed expiry dates since amendments to the Tourism Promotion Act in 1994, provided operators comply with regulatory obligations.

The association argues that introducing periodic renewals after more than three decades could create uncertainty for long-term investment and affect employment. Existing legislation already allows authorities to suspend operations or revoke licences when operators commit serious violations.

The trade group also pointed to the structure of South Korea’s casino market. With the exception of Kangwon Land, casinos generally serve foreign customers, making their ability to compete for international visitors a central concern for operators.

“Stricter regulations and protectionist burdens support the weakening of global competitiveness for reinvestment in the domestic casino industry. It is evident that this will result in the foreign VIP customers that the Korean casino industry has painstakingly attracted being lost to competitors in Southeast Asia and neighboring Japan.

“While major competitor nations are fostering their industries by opening up their domestic markets or respecting autonomy, Korea is adhering solely to stricter regulations. To enable the casino industry to contribute to national and regional economic development and tourism promotion, the conversion licensing system and the balance with tourism funds must be immediately abandoned, and a shift toward policy-based nurturing and support is required.”

The association cited the planned MGM Osaka integrated resort in Japan as an example of increasing regional competition. The resort, developed by MGM Resorts International with local partners, is scheduled to open in late 2030.

The trade body argues that South Korean casinos need continued investment to compete for high-value international customers once additional integrated resort capacity enters the regional market.

An association representative said other Asian jurisdictions are taking steps to support gaming development while “South Korea continues to pursue tighter regulation”.

“The government should immediately withdraw the proposed licence renewal system and the increase in the tourism fund contribution rate, and instead adopt policies that support and promote the casino industry so that it can continue contributing to national and regional economic development and tourism promotion,” the person stated.

Casino Group Warns of Wider Economic Consequences

As reported by Inside Asian Gaming, Korea Casino Association Chairman Choi Sung-wook repeated the industry’s objections during the Tourism Industry Legal System Advancement Forum at the National Assembly Members’ Office Building.

“Regulating casinos as a gambling industry on one hand while viewing them as a major source of the tourism fund on the other is a double standard. Raising the tourism fund levy cap to 15% goes beyond worsening business conditions and is tantamount to hastening the bankruptcy of loss-making companies.”

The association has also pointed to market reaction following reports about the proposed changes. Casino company share prices fell sharply on July 15 even as the broader Kospi index gained, which the industry body cited as evidence of investor concerns.

The government maintains that the regulatory framework requires updating after decades of growth in South Korea’s casino sector. The industry association argues that the proposed approach could weaken operators’ ability to finance major projects and compete with other Asian destinations.

The final structure of the higher tourism fund contribution remains subject to further discussion. The government plans to determine the relevant revenue threshold and applicable rate through amendments to the enforcement decree following consultation with the casino industry, academics and other experts.