Korea Casino Association Warns Higher Tourism Levy Could Trigger Casino Bankruptcies

Casino industry opposes proposed increase in tourism levy

The controversy follows a proposal by the Ministry of Culture, Sports and Tourism to raise the maximum contribution paid by foreigner-only casino operators to the Tourism Promotion and Development Fund from 10% to 15% of revenue.

The proposal also introduces a five-year casino license renewal system and requires prior government approval for the transfer or acquisition of significant ownership interests in casino companies.

According to industry analysts, the higher levy could reduce casino profits by up to 37% in 2026, while forcing operators to significantly scale back capital investment plans.

Industry argues casinos are taxed differently from other sectors

In a statement, the Korea Casino Association criticized the current taxation model, arguing that casinos remain the only industry required to contribute to the tourism fund based on gross revenue rather than profitability.

The Association stated:

"Unlike general levies that are imposed based on profit generation or income and corporate taxes, the casino industry is the only sector that pays to the fund based on 'revenue' even when operating at a loss."

It also pointed out that between eight and fifteen of South Korea's 17 to 18 casino operators have reported annual operating losses during the past decade, illustrating the financial pressures already affecting the sector.

Association warns of bankruptcies and reduced investment

The Association argues that increasing the maximum levy from 10% to 15%, while maintaining existing tax obligations—including individual consumption tax, corporate tax, and local taxes—would place an unsustainable burden on casino operators.

According to the KCA:

"Increasing the levy from 10% to 15% on top of the existing burden of paying individual consumption tax (2 to 4% of revenue), corporate tax, and local taxes, will hasten the bankruptcy of casino companies that are barely recovering from the aftermath of COVID-19 and are racing toward normalization."

New licensing proposal raises additional concerns

Beyond the financial impact, the Association also criticized the government's proposal to replace the current ongoing licensing framework with a mandatory five-year renewal system.

According to the KCA, more restrictive licensing requirements could discourage long-term investment and weaken South Korea's ability to compete with neighboring gaming jurisdictions.

The organization stated:

"Stricter regulations and protectionist burdens support the weakening of global competitiveness for reinvestment in the domestic casino industry."

It added:

"It is evident that this will result in the foreign VIP customers that the Korean casino industry has painstakingly attracted being lost to competitors in Southeast Asia and neighboring Japan."

The Association concluded that the proposed licensing model should be abandoned in favor of policies that encourage investment and support tourism development.

Chairman criticizes government's "double standard"

The Association's position was reiterated by Choi Sung-wook, Chairman of the Korea Casino Association, during the Tourism Industry Legal System Advancement Forum, held at the National Assembly Members' Office Building.

Addressing policymakers, Choi argued that the government applies contradictory standards when regulating casinos.

"Regulating casinos as a gambling industry on one hand while viewing them as a major source of the tourism fund on the other is a double standard."

He added:

"Raising the tourism fund levy cap to 15% goes beyond worsening business conditions and is tantamount to hastening the bankruptcy of loss-making companies."

Tourism fund contributions continue to rise

According to Choi, casino operators contributed KRW 219.5 billion to the Tourism Promotion and Development Fund in 2025, representing the highest annual contribution on record and an increase of 61.7% compared with the KRW 135.7 billion collected in 2019.

Government says regulations need modernization

According to local media reports, the Ministry of Culture, Sports and Tourism believes the current regulatory framework has remained largely unchanged for three decades despite significant expansion of the casino industry.

Government officials argue that systems governing licensing, ownership oversight, and public contributions should be updated to reflect an industry whose revenue has increased tenfold since 1995.

As discussions continue, the debate highlights the challenge of balancing government revenue, regulatory oversight, tourism development, and the long-term competitiveness of South Korea's foreigner-only casino sector.