South Korean Casino Operators Raise Concerns Over Proposed Tourism Levy Increase

The Korea Casino Association has issued a direct warning that raising the maximum tourism levy from 10 percent to 15 percent of revenue, combined with five-year license renewal cycles, could accelerate bankruptcies among South Korea’s foreigner-only casino operators still recovering from COVID-19 losses. The group represents operators that cater exclusively to international visitors and currently contribute through a revenue-based levy system that applies regardless of profitability.

Proposed Regulatory Adjustments Under Review

Under the new framework the levy ceiling would climb from its existing 10 percent cap to 15 percent while license terms would shift to mandatory five-year renewals. These modifications arrive as operators attempt to stabilize after pandemic-related closures and travel restrictions that slashed visitor numbers. The association points out that the levy structure remains unique because it taxes gross revenue even during periods of operating losses, creating sustained pressure on facilities that have posted deficits.

Observers note that roughly half of the operators have recorded annual shortfalls over the past decade. This pattern persisted despite the sector delivering record contributions of KRW219.5 billion in 2025, a 61.7 percent increase compared with 2019 levels. The association argues that layering higher levies on top of existing revenue-based taxation would compound financial strain rather than support recovery.

Revenue Contributions and Recovery Challenges

Data released by the association shows the 2025 contribution figure marks the highest annual total on record for the foreigner-only segment. Yet the same operators face ongoing deficits that predate the pandemic and continued through multiple years of fluctuating tourism inflows. The levy applies uniformly to revenue, which means facilities operating below break-even still remit payments calculated on total income before expenses.

Industry reports indicate that the combination of higher levy rates and shorter renewal periods would force operators to accelerate cost-cutting measures or consider closure. Five-year license cycles introduce additional administrative and compliance expenses that smaller facilities may struggle to absorb while simultaneously managing elevated tax obligations. The association has highlighted these factors as direct threats to continued operation for members still rebuilding visitor traffic.

Levy Structure and Long-Term Deficit Patterns

The current system levies taxes on revenue irrespective of net profit, a distinction the association emphasizes when comparing casinos to other tourism sectors. Over the ten-year span ending in 2025, approximately 50 percent of operators posted yearly deficits under this model. The 2025 contribution surge reflects stronger post-pandemic visitor numbers, yet the underlying deficit rate remains unchanged for many properties.

According to statements from the Korea Casino Association, the proposed 15 percent ceiling would extract additional revenue from operators already remitting substantial sums. The group notes that KRW219.5 billion paid in 2025 demonstrates the sector’s capacity to deliver fiscal support, but warns that further increases risk eroding the very base that generates those payments. License renewal requirements add another layer of uncertainty because operators must demonstrate financial viability every five years under potentially higher cost structures.

Implications for Foreigner-Only Operators

Foreign visitor traffic drives the entire segment, and any policy shift that reduces operator margins could limit future investment in facilities and marketing. The association has presented its position to regulators, citing both the historical deficit data and the record 2025 contribution as evidence that the current framework already extracts significant value while leaving many operators vulnerable. Shifts in the levy rate would apply across all qualifying properties, creating uniform pressure regardless of individual facility performance.

Conclusion

The Korea Casino Association’s warning centers on the interaction between a proposed 15 percent tourism levy, five-year license renewals, and the existing revenue-based taxation model that continues to affect operators reporting deficits. With half the segment posting annual shortfalls over the past decade and KRW219.5 billion contributed in 2025, the group maintains that the changes would hasten financial distress for facilities still rebuilding after COVID-19 disruptions. Regulators now hold the details of the proposal while operators await final determinations on the levy ceiling and renewal terms.