Korea Casino Association Highlights Risks From Proposed Tourism Levy Adjustments

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, has issued a warning about a government proposal that would raise the maximum tourism levy from 10% to 15% of revenue, noting that such a change could accelerate bankruptcies among operators still working through the effects of the COVID-19 pandemic, while the Ministry of Culture, Sports and Tourism has put forward these adjustments along with stricter licensing requirements that the association argues place unique burdens on the sector compared to other industries.

Observers note that the revenue-based levy structure stands out because it applies specifically to casino operators, and the association has pointed out that this approach differs from taxation methods used in competing markets across Southeast Asia and Japan, where operators face different regulatory frameworks that allow for greater flexibility during periods of financial recovery.

Details of the Proposed Changes and Industry Response

Under the current system the levy sits at a maximum of 10% of revenue, yet the ministry’s plan would push that ceiling to 15%, and analysts have calculated that this adjustment could reduce 2026 profits by as much as 37% for affected operators, creating additional pressure at a time when many facilities continue to rebuild visitor numbers and stabilize cash flows after pandemic-related closures and travel restrictions.

The association has also criticized accompanying proposals for tighter licensing rules, which it says would compound the financial strain by increasing compliance costs and limiting operational options, and representatives have emphasized that these combined measures risk undermining the ability of South Korean casinos to compete effectively with regional rivals that operate under lighter regulatory loads.

Context of Post-Pandemic Recovery Efforts

Operators in South Korea have spent recent years focused on restoring pre-pandemic revenue levels, and the association has highlighted that many facilities still carry debt or face ongoing challenges in attracting international visitors, while the proposed levy increase arrives at a moment when margins remain thin and any additional extraction of revenue could tip marginal properties into insolvency.

Data from industry reports indicate that the unique application of a revenue-based tourism levy to casinos alone creates an uneven playing field, and the association has argued that Southeast Asian and Japanese competitors benefit from more predictable or lower-percentage contributions that do not scale directly with gross revenue, allowing those markets to offer more attractive packages to tourists and maintain steadier growth trajectories.

Those who have examined the ministry’s proposal note that the stricter licensing conditions would require operators to meet elevated standards for financial reporting and operational oversight, adding layers of administrative work that smaller or recovering properties may struggle to absorb without cutting staff or reducing service offerings, and the association has warned that such requirements could further slow the pace of recovery across the foreigner-only casino segment.

Potential Broader Effects on Competitiveness

Regional competition has intensified as Japan and several Southeast Asian nations expand their integrated resort offerings, and the Korea Casino Association has stated that the combination of higher levies and tighter rules would make it harder for South Korean operators to match marketing budgets, facility upgrades, or promotional incentives available elsewhere, potentially diverting tourist spending to neighboring destinations.

Figures released in connection with the proposal show that a 5-percentage-point increase in the levy could translate into tens of millions of dollars in additional annual payments for larger properties, and the association has used these calculations to illustrate how even modest operators might face cash-flow shortfalls that force asset sales or restructuring, outcomes that would reduce the overall capacity of the sector to contribute to national tourism goals.

Conclusion

The Korea Casino Association continues to engage with the Ministry of Culture, Sports and Tourism over the details of the levy adjustment and licensing reforms, presenting data that links the proposed changes to heightened bankruptcy risks and diminished regional competitiveness, while ministry officials have framed the measures as necessary steps to ensure sustainable tourism funding and regulatory consistency across the casino industry.