Korea Casino Association Flags Risks From Tourism Levy Proposal

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, has issued a formal warning in July 2026 that a proposed hike in the tourism levy from 10 percent to 15 percent of revenue would accelerate bankruptcies among operators still recovering from the COVID-19 downturn, and the group has also highlighted several other longstanding regulatory issues that it says place the sector at a disadvantage relative to competitors in Southeast Asia and Japan.

According to the association the revenue-based levy stands out because it remains unique among industries operating in the country, and when combined with five-year license renewal cycles plus additional regulatory requirements the cumulative burden reduces the ability of operators to maintain financial stability during periods of slower visitor numbers.

Details of the Levy Adjustment Under Consideration

The Ministry of Culture, Sports and Tourism has put forward the changes that would lift the levy by five percentage points, representing a 50 percent increase on the current rate, and the fund supported by these collections reached a record KRW219.5 billion from casinos in 2025, yet the association argues that further escalation would outpace the pace of post-pandemic recovery for many properties.

Operators note that the levy applies directly to gross revenue rather than profit, which means even facilities operating at low margins or experiencing temporary downturns must remit the full percentage, and this structure differs from typical tax treatments applied to other tourism-related businesses that often calculate obligations after expenses.

Recovery Challenges Facing Foreigner-Only Casinos

Many of the casinos represented by the association continue to manage reduced visitor volumes and elevated operating costs that emerged during the pandemic period, and the group contends that an immediate 50 percent levy increase would compress already narrow margins to the point where some properties could no longer sustain operations without external support or ownership changes.

Those who have studied the sector’s financial reports observe that recovery trajectories vary by location and scale, yet the uniform application of the higher rate across all operators would not account for these differences, thereby placing smaller or more remote facilities at greater risk of insolvency within a shorter timeframe.

Additional Regulatory Burdens Cited by the Association

Beyond the levy itself the Korea Casino Association has drawn attention to the five-year license renewal process, which requires operators to undergo repeated evaluations and incur associated administrative costs at regular intervals, and it has also pointed to other unspecified regulatory obligations that together increase compliance overhead without corresponding adjustments for market conditions.

The combination of these factors, according to the association statement, creates an operating environment that differs markedly from regulatory frameworks in competing destinations where longer license terms and alternative levy structures allow operators greater flexibility to reinvest in facilities and marketing during recovery phases.

Regional Competitiveness Considerations

Observers note that casinos in Southeast Asia and Japan operate under different tax and licensing regimes that the association believes provide those markets with structural advantages in attracting international visitors, and the group argues that South Korean operators face higher relative costs that could shift tourism flows away from domestic properties if the proposed changes take effect.

Data from recent years shows steady growth in regional casino tourism, yet the association maintains that without adjustments to the current levy and renewal schedule Korean facilities risk losing market share to jurisdictions where similar revenue-based levies do not apply or where license periods extend beyond five years.

Record Fund Collections Reported for 2025

The tourism fund that receives the casino levy recorded KRW219.5 billion in contributions during 2025, establishing a new high for collections, and this figure reflects both increased visitor activity in certain periods and the existing 10 percent rate applied to operator revenues, while the ministry’s proposal would scale future contributions proportionally higher if implemented.

Those reviewing the collection statistics point out that the record total occurred even as some operators continued to report uneven recovery patterns, which underscores the association’s concern that further rate increases could strain facilities that have not yet returned to pre-pandemic revenue levels.

Ministry Proposal and Industry Response Timeline

The Ministry of Culture, Sports and Tourism advanced the levy adjustment proposal in the period leading into July 2026, prompting the Korea Casino Association to issue its public warning and outline the broader set of regulatory concerns, and discussions between the ministry and industry representatives remain ongoing as operators seek clarification on implementation timelines and potential mitigation measures.

The association has emphasized that its position centers on preserving operational viability for member casinos rather than opposing tourism funding in principle, and it continues to advocate for levy structures and licensing terms that align more closely with those observed in competing Asian markets.

Conclusion

The Korea Casino Association’s July 2026 statement brings together concerns over the proposed 15 percent tourism levy, the unique revenue-based collection method, five-year license renewals, and additional regulatory requirements, all framed against the backdrop of post-COVID recovery and regional competition, while the record KRW219.5 billion collected in 2025 illustrates the scale of current contributions that would rise further under the ministry’s plan.