A group of 12 tourism-linked organizations have issued a joint statement requesting that South Korea’s Ministry of Culture, Sports and Tourism withdraw a casino industry reform plan currently under review that could increase casino operators’ maximum levy by 50%.
According to the Seoul Economic Daily, the 12 organizations include the Korea Casino Association, the Korea Tourism Association, the Korea Hotel Association and the Korea Association of Travel Agents, who issued the statement on Monday.
The plan to increase foreigner-only operated casino contributions from 10% to 15% of gaming revenue has seen fierce pushback from the industry, with the Korea Casino Association previously arguing that “the casino industry is the only sector that pays to the fund based on ‘revenue’ even when operating at a loss.”
The group has said that the increase in levy, “on top of the existing burden of paying individual consumption tax (2% to 4% of revenue), corporate tax and local taxes will hasten the bankruptcy of casino companies that are barely recovering from the aftermath of COVID-19.”
The new joint letter echoes the concern about a levy based on revenue instead of profit, noting that roughly half of domestic casino operators saw operating losses over the past decade and smaller operators could be particularly burdened.
Industry analysts have warned that the proposed increase could hit profits by as much as 37% this year alone.
The group also takes issue with the proposal to renew casino business licenses every five years, noting that early investments in integrated resorts range from billions to trillions of won, taking a long time to recover. As such, the proposed tax hike would render future IR investment and the attraction of foreign capital particularly difficult.
The letter similarly highlights the expansion of offerings in established markets such as Macau, Singapore and the Philippines, and the upcoming opening of MGM Osaka in Japan, noting, “If excessive fund increases and short-term renewal regulations hold back the domestic industry, Korea’s tourism industry will not escape a vicious cycle of losing global market leadership and national wealth outflow.”
In an interview with Maeil Business, the president of the Korean Tourism Association, Seo Won-seok, indicated that the increase in the fund contribution could reduce the operating profit of Korean casinos by 20% to 30%. The executive noted that, “A higher level of policy justification and objective grounds than general taxes are required.”
The Korea Casino Association Chairman Choi Sung-wook previously indicated that the nation’s tourism fund received KRW219.5 billion (US$153 million) from casino operators in 2026, the highest amount ever and a 61.7% increase on the KRW135.7 billion (US$94.8 million) charged in 2019.
The levy on casino operators runs on a sliding scale and is charged on a property-by-property basis.
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