Korea Casino Association Highlights Risks from Proposed Tourism Levy Adjustments for Foreigner-Only Casinos

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, has issued a warning about proposed regulatory shifts that include raising the maximum tourism levy from 10% to 15% of revenue along with five-year license renewal cycles; these changes, according to the group, could accelerate bankruptcies among operators still rebounding from pandemic-related losses while they continue making substantial contributions to government revenues.

Current Levy Structure and Industry Recovery Context

Operators in this segment pay the tourism levy based on gross revenue regardless of whether facilities operate at a profit or loss, and the association notes that this mechanism stands out compared to standard corporate taxation models applied elsewhere in the economy; roughly half of the operators have recorded annual deficits across the past decade even as they delivered record contributions totaling KRW219.5 billion in 2025, marking a 61.7% increase from 2019 levels.

Data from industry monitoring shows that many facilities reopened progressively after COVID-19 restrictions lifted yet still face uneven visitor flows and elevated operational costs during the recovery phase, and the proposed levy hike would compound these pressures by directly scaling the revenue-based tax burden without adjustments for profitability.

Key Concerns Raised by the Association

The group emphasized that casinos remain uniquely exposed because the levy applies to top-line revenue figures even during periods of negative earnings, creating cash-flow strains that differ from other tourism sectors where taxes typically tie to net results; five-year license renewals add another layer of administrative and financial uncertainty for operators planning long-term investments in infrastructure and marketing.

Observers note that the combination of these elements could reduce available capital for facility upgrades and staff retention at a moment when international tourism numbers are stabilizing but have not returned uniformly across all properties, and the association points to historical deficit patterns as evidence that sustained revenue-based levies during loss-making years have already challenged multiple operators.

Financial Contributions and Sector Performance

Figures reveal that the KRW219.5 billion contributed in 2025 represents the highest annual total recorded in recent years, reflecting both revenue growth and the sector’s ongoing role in supporting tourism-related government funds; this performance occurred alongside the recovery trajectory from 2019 benchmarks, demonstrating resilience despite the structural challenges of revenue-based taxation.

Industry reports indicate that the foreigner-only model restricts domestic market access, which narrows revenue diversification options during periods when inbound travel fluctuates, and the association argues that maintaining the current 10% ceiling while preserving more flexible licensing terms would better align with the sector’s post-pandemic stabilization needs.

Regulatory Background and Proposed Changes

Under existing rules the tourism levy caps at 10% of revenue for these operators, with proceeds directed toward tourism development initiatives, and the proposed adjustment would lift that maximum while introducing fixed five-year renewal intervals that replace potentially longer or more variable licensing periods; regulators have not yet finalized the measures, leaving room for further input from industry stakeholders.

Those familiar with the regulatory timeline note that discussions around levy adjustments often coincide with broader tourism policy reviews, and the Korea Casino Association’s statement arrives as operators continue to track visitor recovery metrics against pre-pandemic baselines in 2025 and into 2026.

Potential Industry Outcomes

Analyses from sector observers suggest that increased levies applied uniformly across revenue streams could widen the gap between stronger and weaker performing properties, potentially concentrating market share among a smaller number of operators if bankruptcies materialize; the association has highlighted that such consolidation might reduce overall sector diversity and limit employment opportunities tied to casino operations.

Evidence from the past decade shows repeated deficit years for approximately half the operators, underscoring how revenue-based levies interact with cyclical tourism demand and external shocks such as health crises, and the current warning frames the proposed changes as an additional risk factor during this specific recovery window.

Conclusion

The Korea Casino Association’s position centers on preserving the existing levy structure and licensing flexibility to support continued recovery and sustained contributions, with the KRW219.5 billion figure from 2025 serving as a benchmark of the sector’s economic role; as discussions around the 15% maximum and five-year renewals proceed, operators and regulators alike face decisions that will shape the financial landscape for foreigner-only casinos in South Korea through the remainder of 2026 and beyond. ASGAM coverage and CDC Gaming reports provide additional context on these developments.