South Korean Casino Operators Face Pressure from Proposed Tourism Levy Increase

The Korea Casino Association issued a direct warning in July 2026 about a proposed rise in the mandatory tourism levy that would lift the current maximum from 10 percent to 15 percent of revenue. The group stated this change would accelerate bankruptcy risks for foreigner-only casino operators still rebuilding after the COVID-19 pandemic. Association representatives pointed out that casinos face taxation based solely on revenue regardless of profit or loss positions and referenced record collections for the tourism fund reaching KRW219.5 billion in 2025, a 61.7 percent jump from 2019 levels.

Details of the Levy Proposal and Industry Response

Under the existing framework the tourism levy caps at 10 percent of gross revenue for casinos licensed to serve foreign visitors only. The new plan under discussion would push that ceiling to 15 percent, a shift the association argues comes at a fragile moment when many properties continue to report uneven recovery in visitor numbers and spending. Observers note the timing coincides with broader government efforts to boost tourism-related revenue streams while the sector works through lingering effects from pandemic closures and travel restrictions that lasted into 2022 and 2023.

Association statements emphasized that revenue-based taxation creates unique pressure because operators must remit the levy even during periods of negative earnings. Data from 2025 showed the tourism fund collected KRW219.5 billion, which represents the highest annual total recorded and marks a substantial increase over pre-pandemic figures. Those figures come from official tracking of casino contributions and related tourism activities across the country.

Operators have cited examples where extended license terms in competing jurisdictions enabled sustained reinvestment in facilities and staff training programs. The five-year renewal cycle under consideration would require more frequent compliance reviews and reapplication processes that add administrative costs and uncertainty for long-term projects. Stricter ownership rules could limit foreign investment options at a time when many properties seek additional capital to complete post-pandemic renovations.

Current Tourism Fund Performance and Sector Recovery

Figures released for 2025 indicate the tourism fund reached KRW219.5 billion, up 61.7 percent compared with 2019 collections before the pandemic disrupted travel. This growth occurred even as some casino properties reported occupancy rates and table game volumes that remained below 2019 benchmarks. The Korea Casino Association used these numbers to illustrate that the fund already benefits from strong contributions without the proposed levy hike, suggesting the increase could strain operators without delivering proportional new tourism benefits.

Government data tracked through the Ministry of Culture, Sports and Tourism shows continued growth in inbound visitor arrivals from key source markets in 2025 and early 2026. Ministry reports highlight casinos as one component of broader tourism infrastructure, yet the association maintains that revenue-based levies applied during recovery periods limit the ability to expand marketing and service offerings that attract higher-spending international guests.

Regional Competitiveness Considerations

Operators compared the proposed changes with regulatory approaches in nearby markets where integrated resorts enjoy multi-year license stability and ownership flexibility that supports large-scale development. The association noted that neighboring destinations have attracted significant foreign direct investment partly because of predictable renewal processes and ownership structures that allow international partners to participate. South Korean properties, by contrast, would face higher effective costs and shorter planning windows under the combined proposals, according to the group’s assessment.

UN Tourism data on Asia-Pacific casino markets indicates that jurisdictions offering longer license periods and moderate taxation frameworks have seen faster post-pandemic rebounds in capital expenditure and employment levels. UN Tourism analysis links these regulatory features to sustained growth in visitor arrivals and associated economic multipliers for host regions.

Conclusion

The Korea Casino Association’s July 2026 statement outlines specific financial and regulatory pressures tied to the proposed tourism levy increase, shorter license renewals, and tighter ownership rules. The warning centers on existing revenue-based taxation that continues regardless of operating results, alongside record tourism fund collections that already exceed prior peaks. These elements form the core of the association’s argument regarding potential bankruptcy risks for operators navigating ongoing recovery. The discussion remains part of wider policy deliberations involving tourism revenue targets and industry competitiveness within the Asian gaming sector.