South Korea Casino Operators Highlight Risks from Tourism Levy Proposal

The Korea Casino Association has issued a warning that raising the tourism levy from 10 percent to 15 percent of revenue could accelerate bankruptcies among South Korea’s foreigner-only casino operators, many of which continue recovering from the effects of COVID-19, and the Ministry of Culture, Sports and Tourism has put forward this change alongside plans for five-year license renewals plus stricter ownership regulations.

Operators note that the sector pays taxes based on revenue regardless of profitability, a structure that has left roughly half the businesses posting annual deficits across the past decade even as collections for the tourism fund reached a record KRW219.5 billion in 2025.

Details of the Proposed Changes

The Ministry’s plan would lift the levy applied to casino revenue while introducing five-year renewal cycles for operating licenses and tightening rules around ownership structures, measures that the association argues would add immediate pressure during a period when many facilities still work to stabilize finances after pandemic-related closures and travel restrictions.

Those who have examined the revenue-based taxation model point out that casinos must remit the levy even in years when expenses exceed income, a requirement that distinguishes the industry from standard corporate tax frameworks and has contributed to sustained deficits for numerous operators.

Industry Financial Context

Over the previous ten years approximately half of the foreigner-only casino operators have recorded annual shortfalls, a pattern the association connects directly to the revenue levy that applies uniformly whether facilities operate at a profit or loss, and this ongoing situation has left parts of the sector vulnerable as they attempt to rebuild visitor numbers and revenue streams.

Record tourism fund collections of KRW219.5 billion in 2025 demonstrate the scale of contributions already flowing from the current 10 percent rate, yet the association maintains that an increase to 15 percent would push several properties past the point of recovery.

Observers note that the combination of higher levies, shorter license periods, and ownership restrictions could compound existing challenges because facilities must generate sufficient revenue to cover both operational costs and the mandatory tourism contribution before any possibility of profit emerges.

Association Position and Broader Implications

The Korea Casino Association has stated that the proposed adjustments would hasten bankruptcies among operators still emerging from COVID-19 impacts, emphasizing that the revenue-based taxation already places unique burdens on the industry compared with other tourism sectors that typically calculate obligations after expenses.

Those familiar with the regulatory environment highlight how five-year license renewals would replace existing longer terms while stricter ownership rules would limit flexibility for investors seeking to stabilize or expand operations, changes that arrive at a moment when visitor recovery remains incomplete.

Data from recent years shows consistent deficits for many facilities despite overall growth in tourism fund receipts, underscoring the narrow margins under which these casinos function when the levy applies directly to gross revenue.

Conclusion

The Korea Casino Association’s warning ties the proposed levy increase directly to risks of further bankruptcies, placing the Ministry of Culture, Sports adn Tourism’s package of reforms—including five-year license cycles and tighter ownership standards—under scrutiny as operators reference the decade-long pattern of deficits and the record KRW219.5 billion collected in 2025 under the existing 10 percent rate.

According to the Statement on proposed tourism levy increase (July 2026), these elements together form the core concerns raised by the association representing South Korea’s foreigner-only casino operators.