Korea Casino Association Highlights Risks from Tourism Levy Proposal for Foreigner-Only Operators

The Korea Casino Association, which represents South Korea's foreigner-only casino operators, issued a warning in July 2026 about a proposed increase in the maximum tourism levy from 10 percent to 15 percent of revenue, noting that such a change would accelerate bankruptcies among properties still recovering from the COVID-19 pandemic, and operators pointed out that casinos face unique taxation applied directly to revenue even during periods of operating losses while the tourism fund collected a record KRW219.5 billion from these businesses in 2025, a figure 61.7 percent higher than the amount gathered in 2019, and the group also criticized additional proposed adjustments including five-year license renewals.

Details of the Proposed Levy Change

Under the current structure the tourism levy stands at a maximum of 10 percent applied to gross revenue from foreigner-only casinos, yet the suggested adjustment would raise that ceiling to 15 percent, and representatives from the association explained that this shift comes at a time when many facilities continue to rebuild visitor numbers and stabilize finances after the widespread disruptions caused by the pandemic, while the levy applies regardless of whether an operator reports a profit or sustains losses in a given period, creating a distinct financial pressure compared to other tourism sectors that typically calculate obligations based on net earnings.

Observers note that the higher collections reflect both expanded operations at some sites and the fixed nature of the levy calculation, and the association highlighted how this mechanism differs from standard business taxation models where losses can offset obligations, and they argued that maintaining or increasing the rate during ongoing recovery efforts places additional strain on facilities working to restore pre-pandemic visitor flows and revenue stability.

Concerns Over License Renewal Adjustments

The association also voiced criticism of companion proposals that would shift license renewals to a five-year cycle, explaining that shorter renewal periods introduce greater uncertainty for long-term planning and investment decisions at a moment when operators seek predictability to support recovery initiatives, and representatives stated that frequent renewals could complicate efforts to secure financing or commit to infrastructure upgrades needed to attract international visitors once more.

Those familiar with the regulatory environment point out that current licensing terms allow for longer stability periods, whereas the proposed five-year framework would require repeated reviews and approvals, potentially diverting resources from operational improvements toward compliance processes, and the group connected this issue directly to the levy increase by noting that combined pressures from higher revenue-based payments and shorter license horizons could compound financial challenges for properties already operating under tight margins during the post-pandemic phase.

Broader Implications for Foreigner-Only Casinos

Foreigners-only casinos in South Korea operate under a distinct regulatory regime that separates them from domestic gambling venues, and the association's statement underscores how the revenue levy applies uniformly across this segment even when individual operators report losses, a practice that industry participants say sets these businesses apart from many other tourism-related enterprises that enjoy more flexible tax treatments during downturns, and the record KRW219.5 billion collection in 2025 demonstrates the scale of contributions already flowing into the tourism fund despite lingering effects from reduced travel in prior years.

People involved in the sector have observed that the 61.7 percent jump in fund collections since 2019 coincides with gradual market rebound, yet the proposed levy hike to 15 percent would extract a larger share of gross revenue at a point when many facilities still work to achieve consistent profitability, and the association tied this directly to potential bankruptcy risks by illustrating how sustained revenue-based obligations without loss offsets could erode reserves built during stronger periods.

Industry Response and Regulatory Context

The Korea Casino Association framed its warning around the combined impact of the levy proposal and the five-year renewal suggestion, arguing that these measures together reduce operational flexibility for operators focused on post-COVID stabilization, and statements released in July 2026 emphasized that the current 10 percent maximum already generates substantial contributions as evidenced by the 2025 figures, while any increase would accelerate financial distress at properties that have not yet fully returned to pre-pandemic performance levels.

Regulatory discussions around the tourism levy occur within broader efforts to support South Korea's visitor economy, yet the association's position centers on the unique application of the levy to gross revenue rather than profits, a distinction that becomes particularly relevant when operators face variable international demand, and the group referenced the KRW219.5 billion record collection to show the existing level of industry support for the tourism fund before any rate adjustment takes effect.

Conclusion

The Korea Casino Association's July 2026 statement outlines specific concerns about the proposed tourism levy increase to 15 percent of revenue along with five-year license renewals, citing risks of accelerated bankruptcies for foreigner-only casinos still recovering from the COVID-19 pandemic, the revenue-based levy structure that applies even during losses, the record KRW219.5 billion collected in 2025 representing a 61.7 percent rise from 2019 levels, and the need for greater regulatory predictability to support ongoing recovery, and these points form the core of the industry's communicated position on the matter.