South Korea Casino Operators Flag Risks from Tourism Levy Adjustment Proposal

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, has issued a direct warning about a government proposal to raise the mandatory levy paid into the Tourism Promotion and Development Fund, and observers note that the change could move the rate from a current maximum of 10 percent of revenue up to 15 percent. The association argues this adjustment would accelerate financial pressure on properties still working through post-pandemic recovery, since the levy applies to gross revenue regardless of whether an operator posts a profit or a loss in any given year.

Roughly half of the operators covered by the association have recorded annual deficits at some point over the past decade, which means the charge lands even when revenue falls short of costs. On top of the levy sit other existing taxes, and the group contends that the combined burden reduces the ability of these casinos to compete with regional counterparts in markets where similar contributions sit at lower effective rates. The proposal also introduces five-year license renewal cycles along with a requirement for prior government approval on major ownership changes, measures that the association says add administrative layers during an already delicate recovery phase.

Details of the Proposed Changes and Industry Response

Under the current framework the levy sits at a maximum of 10 percent of revenue, yet the suggested revision would allow the rate to climb as high as 15 percent while maintaining the same base calculation on gross figures. The Korea Casino Association has highlighted that this structure continues to apply during loss-making periods, a point emphasized because data shows persistent deficits among multiple operators across recent years. The fund itself collected a record KRW219.5 billion from casino contributions in 2025, a figure that represents a 61.7 percent increase compared with the KRW135.7 billion gathered in 2019 before the pandemic disruptions took hold.

Those who have reviewed the proposal point out that the five-year license renewal requirement replaces what had been longer or more open-ended terms in some cases, while the ownership-change approval process would require advance sign-off before significant shifts in control could occur. The association’s statement frames these elements together as a package that could compound operating challenges at a moment when visitor volumes and revenue streams have not fully returned to pre-2020 levels. Data from the fund collection shows steady growth in contributions despite the uneven recovery, which the group interprets as evidence that operators are already meeting existing obligations at scale.

Financial Context and Regional Competitiveness Concerns

The levy applies uniformly to revenue, which means loss-making operators still remit the percentage even when annual results show shortfalls. The association has noted that this feature, combined with other tax obligations, creates a cumulative load that operators in competing jurisdictions do not face at the same combined level. Figures from the 2025 collection period indicate that contributions reached KRW219.5 billion, underscoring the scale of payments already flowing into the Tourism Promotion and Development Fund before any rate adjustment takes effect. Those tracking the sector observe that the proposed increase would raise the ceiling from 10 percent to 15 percent, a shift the group warns could tip several properties toward insolvency if visitor numbers or spending patterns do not improve further.

Regional rivals in nearby markets maintain different contribution structures, and the association argues that the gap in effective rates affects the ability of South Korean properties to attract high-value international visitors. The five-year renewal cycle and pre-approval requirement for ownership changes appear in the same legislative package, which the group says introduces additional planning uncertainty at a time when long-term investment decisions remain sensitive. Collection data reveals that the fund received KRW219.5 billion in 2025, up sharply from 2019 levels, yet the association maintains that this growth occurred under the existing 10 percent cap and does not account for the added strain a higher rate would impose during ongoing recovery.

Timeline and Next Steps in the Legislative Process

The proposal surfaced in mid-2026 discussions, with the Korea Casino Association releasing its position statement on 24 July 2026 through industry channels. Lawmakers have not yet finalized the exact implementation date or the precise mechanism for adjusting the levy rate, but the association has urged reconsideration of both the percentage increase and the accompanying licensing provisions. Observers note that any final version would need to balance tourism development goals against the operating realities described by the casino operators, particularly given that half the group has experienced deficits in recent years. The record KRW219.5 billion collected in 2025 provides a baseline against which future payments would be measured if the ceiling moves to 15 percent of revenue.

Conclusion

The Korea Casino Association’s warning centers on the combined effect of a higher levy ceiling, continued application during loss periods, additional licensing requirements, and the need to remain competitive regionally. Collection figures show the Tourism Promotion and Development Fund received KRW219.5 billion in 2025, reflecting a 61.7 percent rise from 2019, while the proposed shift from 10 percent to 15 percent of revenue forms the core of the current debate. The association continues to present these points as the sector navigates post-COVID conditions, with the outcome of the legislative process expected to shape operating conditions for foreigner-only casinos in the coming years.