South Korea Casino Operators Warn of Risks From Proposed Tourism Levy Increase
Ines Wolf · Jul 25, 2026
South Korea Casino Operators Warn of Risks From Proposed Tourism Levy Increase
The Korea Casino Association has issued a direct warning regarding proposed changes to the tourism levy structure that would raise the maximum rate from 10 percent to 15 percent of revenue while introducing five-year license renewal cycles for foreign-only casino operators across South Korea, and the group emphasizes that such adjustments arrive at a time when many facilities continue their post-pandemic recovery phase. Observers note that the association represents operators whose business models depend entirely on international visitors, and the current system already requires levies even during periods of operating losses because the tax base rests on gross revenue rather than profit margins. Data from 2025 shows the Tourism Promotion and Development Fund collected a record KRW219.5 billion from these casinos, a figure that stands 61.7 percent above the 2019 level, yet the association argues this contribution level already demonstrates substantial support for national tourism initiatives.
Details of the Proposed Changes and Industry Response
Under the new framework the maximum levy would climb to 15 percent of revenue, a shift the association claims would accelerate financial strain on operators still rebuilding visitor numbers after the sharp downturn caused by COVID-19 restrictions, and the five-year renewal requirement would add further uncertainty because shorter license periods reduce long-term planning visibility for capital investments and staffing decisions. Experts have observed that casinos in South Korea operate under a unique tax regime compared with other tourism sectors, since the levy applies regardless of profitability and therefore functions more like a revenue-based fee than a traditional corporate tax, which leaves little flexibility during low-demand cycles when fixed costs remain high. The association urged government officials to reconsider both the rate increase and the shortened renewal timeline in order to preserve competitiveness against regional rivals that maintain lower or more flexible levy structures for their own casino industries.
Those who have studied the sector point out that the record KRW219.5 billion contribution in 2025 reflects strong recovery in international arrivals, yet the same operators continue to face elevated operational costs and slower return of high-roller traffic from key source markets. Figures reveal that any additional percentage point on revenue directly reduces funds available for facility upgrades, marketing campaigns, and workforce retention programs that are essential for attracting repeat visitors. The association highlighted that maintaining the existing 10 percent ceiling would allow operators to reinvest a larger share of earnings into competitiveness measures while still providing significant revenue to the Tourism Promotion and Development Fund, and it noted that the 61.7 percent growth over 2019 levels already exceeds pre-pandemic benchmarks without requiring higher rates.
Current Levy Structure and Competitive Context
The existing system ties the levy directly to revenue, which means operators pay the government percentage even when monthly results show net losses after covering payroll, utilities, and regulatory compliance expenses, and this structure differs markedly from profit-based taxation models used in many neighboring jurisdictions. People familiar with the industry explain that five-year license renewals would introduce repeated administrative reviews and potential policy adjustments every half-decade, creating planning cycles that feel too short for major infrastructure projects or long-term supplier contracts. The Korea Casino Association stressed that regional competitors continue to court international visitors with stable regulatory environments, and any perception of rising costs in South Korea could shift tourist spending toward those alternative destinations. Data indicates the Tourism Promotion and Development Fund benefited substantially from casino contributions in 2025, yet the association maintains that preserving operator viability remains the most reliable way to sustain those inflows over multiple years rather than risking a contraction through higher rates.
Researchers tracking tourism economics have noted that foreign-only casinos in South Korea serve as concentrated points of economic activity because they draw visitors who also spend on hotels, restaurants, shopping, and transportation outside the gaming floor, and reduced operator margins could therefore produce secondary effects across the broader tourism supply chain. The proposed changes would apply uniformly to all member operators represented by the association, which collectively generate the KRW219.5 billion recorded in 2025, and the group warned that bankruptcies among even a subset of facilities would immediately lower future fund contributions while damaging South Korea's reputation as a stable gaming destination. Observers note that the 61.7 percent increase over 2019 already signals robust demand recovery, which suggests the current 10 percent rate continues to support both government revenue goals and industry sustainability without additional pressure.
Potential Outcomes for Operators and Government Revenue
Should the maximum rate rise to 15 percent, operators would face an immediate reduction in available cash flow that could delay recovery investments and increase reliance on external financing during a period when interest rates remain elevated, and the five-year renewal cycle would compound this pressure by requiring repeated demonstrations of financial health under the new levy structure. The association presented its case to policymakers by underscoring that casinos already operate under stricter levy conditions than most other tourism businesses, paying percentages of revenue irrespective of profitability, and that further increases risk undermining the very source of the record KRW219.5 billion collected in 2025. Those who monitor regulatory developments in the region emphasize that South Korea's foreign-only casino segment competes directly with facilities in Macau, Singapore, Japan, and emerging Southeast Asian markets, each of which maintains its own levy and licensing frameworks designed to attract the same international clientele.
Conclusion
The Korea Casino Association has laid out a clear position that the combination of a higher maximum tourism levy and shorter license renewal periods would place undue strain on operators still recovering from pandemic losses, and it has called for retention of the existing 10 percent ceiling to protect both industry competitiveness and the long-term flow of contributions to the Tourism Promotion and Development Fund. The record KRW219.5 billion collected in 2025, representing 61.7 percent growth over 2019, demonstrates the sector's capacity to support national tourism objectives under current rules, while the unique revenue-based levy structure already differentiates casinos from other businesses. Policymakers now hold the decision on whether to implement the proposed adjustments or maintain the framework that has supported recent revenue gains.