South Korea Casino Operators Raise Alarm Over Proposed Tourism Levy Increase

The Korea Casino Association has issued a direct warning that raising the tourism levy from 10 percent to 15 percent of revenue would accelerate financial strain on foreigner-only casino operators still emerging from pandemic losses. The Ministry of Culture, Sports and Tourism advanced teh proposal in July 2026 alongside plans for five-year license renewals and tighter ownership regulations. Association representatives emphasized that casinos face unique taxation applied directly to revenue regardless of profitability and that roughly half the operators have recorded annual deficits across the previous ten years. Data from 2025 shows the tourism fund collected a record KRW219.5 billion under the existing 10 percent levy structure. The association argues that lifting the rate to 15 percent would compound existing pressures without addressing the sector's core recovery challenges. Operators continue to navigate post-COVID visitor patterns while meeting regulatory obligations tied to foreign tourist exclusivity.

Details of the Ministry Proposal

The Ministry's plan includes shifting license terms to five-year cycles and introducing stricter rules on ownership structures. These changes would apply to all foreigner-only facilities represented by the association. Current licensing periods and ownership requirements have remained stable through the recovery phase, yet the new framework seeks to align licensing with updated tourism policy goals.

Revenue-based taxation sets these casinos apart from standard corporate models where losses can offset liabilities. Even during deficit years operators remit the levy on gross revenue, a structure the association says leaves limited room for reinvestment or reserves. Historical figures indicate persistent shortfalls for multiple facilities over the decade leading into 2026.

Industry Financial Context

Record tourism fund collections reached KRW219.5 billion in 2025, reflecting strong performance under the current levy. Association statements note that this revenue stream supports broader tourism initiatives while the proposed increase targets the same operators facing uneven recovery. Foreign visitor numbers have rebounded unevenly across regions, with some locations showing steadier growth than others since pandemic restrictions lifted.

Those tracking the sector observe that revenue taxation continues regardless of operational losses, creating sustained pressure on balance sheets. The association highlighted examples where multiple operators posted deficits in consecutive years, limiting capacity to absorb additional costs. The Ministry proposal does not alter this taxation approach but adds the higher percentage and revised licensing terms.

Potential Impacts on Operations

Association leaders stated that the combined effect of the levy hike, five-year renewals, and ownership restrictions could push several facilities toward bankruptcy proceedings. They pointed to ongoing recovery costs including staffing, maintenance, and marketing aimed at international tourists. The sector relies exclusively on foreign visitors, which introduces additional variables tied to global travel trends and currency fluctuations.

Existing operators have managed deficits while contributing to the tourism fund through the 10 percent levy. The jump to 15 percent would increase annual remittances without corresponding adjustments for loss-making years. Ministry documents frame the changes as measures to strengthen regulatory oversight and ensure long-term sector stability.

Association Position and Data

The Korea Casino Association compiled data showing that half of its members experienced annual deficits over the past ten years. This pattern persisted even as total collections hit the KRW219.5 billion mark in 2025. Representatives argue that revenue-based taxation already places unique burdens on the industry compared with other tourism businesses taxed on profits.

They further noted that five-year license cycles and stricter ownership rules add administrative layers during a period when operators prioritize financial stabilization. The proposal remains under review, with the association urging reconsideration of the levy increase component specifically. Statement on proposed tourism levy increase (July 2026) outlines these concerns in detail.

Broader Regulatory Landscape

Foreigner-only casinos operate under distinct rules that separate them from domestic gaming facilities. The Ministry's focus on license duration and ownership transparency aligns with wider efforts to monitor foreign investment in tourism infrastructure. Operators must maintain compliance with visitor eligibility requirements while managing revenue streams subject to the tourism levy.

Collection figures from 2025 demonstrate the fund's reliance on casino contributions under current rates. Any adjustment to 15 percent would scale those contributions proportionally based on revenue performance. Association analysis ties the proposed changes directly to risks for facilities with thin margins or accumulated losses.

Conclusion

The Korea Casino Association's warning centers on the combined impact of the tourism levy increase to 15 percent, five-year license renewals, and stricter ownership requirements proposed by the Ministry of Culture, Sports and Tourism. Record 2025 collections of KRW219.5 billion occurred under the existing 10 percent structure, while revenue taxation has continued through periods of deficit for approximately half the operators over the past decade. The proposal remains active as of July 2026, with the association continuing to present data on potential operational consequences for the foreigner-only casino sector.