Korea’s INSPIRE Entertainment Resort would struggle to meet its debt obligations if the government proceeds with plans to increase the maximum tourism development fund levy from 10% to 15% of total revenue, an executive has warned.
Kang Dae-suk, Aassistant Vice President of Legal and Government Affairs at INSPIRE, expressed his concerns during a roundtable discussion organized by The Korea Times this week that saw representatives of foreigner-only casinos and academics gather in Seoul.
As reported by IAG, the Ministry of Culture, Sports and Tourism has proposed increasing the maximum contribution charged to foreigner-only casino operators from 10% to 15%, as well as implanting a five-year license renewal system and a prior approval system for the transfer or acquisition of significant interests in casino companies.
Industry analysts have warned that such an increase could hit profits by as much as 37% in 2026 alone and result in a major scaling back of capex investment. The levy, which operates on sliding scale, is charged on a property-by-property basis.
According to Kang, the increase would further damage a resort that is already under financial pressure – with the US$1.6 billion property’s main lender, Bain Capital, having last year seized control after accelerating actions against Mohegan entity MGE Korea Ltd following an event of default.
“We invested nearly KRW2 trillion to build a world-class resort based on government assurances of steady support,” Kang told the roundtable, according to The Korea Times. “Casino gaming occupies less than 4% of facility space.
“Our accumulated deficit reached nearly KRW600 billion (US$434 million) by last year. Despite these heavy losses, we have been borrowing money to pay tens of billions of won in tourism funds every year.”
Kang explained that further increasing its obligations would place refinancing of more than KRW1 trillion (US$724 million) next year at serious risk.
“If financial institutions view this industry as unstable due to arbitrary regulatory hikes, our refinancing costs will soar,” Kang said, as per The Korea Times report. “That will force us to cut operating costs, which directly threatens local employment and cultural investments like our arena.”
Lee Jong-myoung, Executive Director of the Communications Department at Paradise Co, also warned of reduced investment into its properties, including Paradise City in Incheon, not far from INSPIRE.
“Integrated resorts cannot maintain competitiveness without constantly reinvesting in non-gaming facilities such as conventions, luxury hotels and entertainment,” Lee is quoted as saying.
“Foreign-only casinos in Korea operate under volatile external variables like diplomatic tensions and pandemic threats. “Imposing a rigid revenue-based levy increase creates a crushing burden that discourages future investment.”
Seo Won-suk, President of the Tourism Sciences Society of Korea, added, “The non-gaming facilities built by integrated resorts serve as vital national tourism infrastructure. Regulations should aim to foster industry growth and attract foreign visitors rather than penalize operators.”
The roundtable comes after a group of 12 tourism-linked organizations recently issued a joint statement requesting that the Ministry withdraw its levy plan.
The issue of Korea’s tourism development fund levy, as well as the threat posed by the 2030 opening of MGM Osaka in Japan, will be discussed during a panel session at the upcoming IAG Academy Summit, part of IAG EXPO at Manila’s Newport World Resorts from 14 to 17 September.
The session will feature Jaehwan Kim, Chief Marketing Officer of Paradise City, Jaeseok Lee PhD, Associate Professor & Department Chair, Dept of Tourism Management at Kangwon National University and Chen Si, COO at Resorts World Sentosa and former CEO of INSPIRE. The full program of the 2026 IAG Academy Summit will be released soon.
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