South Korean Foreigner-Only Casinos Confront Proposed Tourism Levy Rise to 15 Percent

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, has issued a formal warning that a proposed increase in the tourism levy from 10 percent to 15 percent of revenue would hasten bankruptcies for casinos still recovering from COVID-19, and the Ministry of Culture, Sports and Tourism’s broader proposal also includes five-year license renewals together with stricter ownership rules while the association highlights that the industry remains uniquely taxed on revenue even when operators record losses.

Details of the Ministry Proposal

Observers note that the Ministry of Culture, Sports and Tourism put forward the levy adjustment alongside plans to shift license terms to five-year renewal cycles and to tighten ownership requirements, all of which the Korea Casino Association addressed in its July 2026 statement; the association emphasized that roughly half of operators have posted annual deficits over the past decade, and data from 2025 shows record collections of KRW219.5 billion directed to the tourism fund.

Those who have tracked the sector point out that the revenue-based taxation structure creates ongoing pressure because operators must remit the levy regardless of profitability, a system the association contrasts with other industries that typically calculate obligations after costs; the proposal therefore arrives while many properties continue to rebuild visitor numbers and stabilize cash flow following pandemic restrictions.

Financial Pressures on Operators

Industry representatives have outlined that the current 10 percent levy already contributes to sustained deficits for multiple members, and an additional five percentage points would compound those challenges at a time when recovery remains incomplete; the association further noted that the tourism fund received KRW219.5 billion in 2025, a figure that reflects strong collections even as individual operators face uneven results.

Researchers who monitor gaming taxation across Asia have observed that South Korea’s foreigner-only model imposes the levy directly on gross revenue rather than net profit, which means facilities operating at a loss still transfer funds to the government; the Korea Casino Association used this distinction to argue that the proposed hike would accelerate financial strain without corresponding improvements in operating conditions or visitor inflows.

License and Ownership Rule Changes

The Ministry’s plan to introduce five-year license renewals and stricter ownership rules forms part of the same package as the levy increase, and association members have requested further discussion on how these measures would interact with existing recovery timelines; longer renewal periods could provide greater planning certainty, yet tighter ownership criteria might limit flexibility for operators seeking new investment or restructuring.

Figures released alongside the July 2026 discussions show that the tourism fund continues to benefit from the existing levy framework, yet the association maintains that the revenue base supporting those collections remains fragile because multiple casinos report persistent shortfalls; the combination of higher rates, fixed renewal cycles, and ownership constraints therefore presents a multifaceted adjustment for the sector.

Context of Post-COVID Recovery

Casino operators in South Korea have worked to restore international visitor traffic since pandemic-related closures and travel limits ended, and the association’s warning ties directly to concerns that an increased levy would divert resources away from marketing, staff retention, and facility upgrades needed for sustained rebound; the record KRW219.5 billion collected in 2025 demonstrates the fund’s growth, while the underlying operator-level data reveals ongoing deficits for half the membership over ten years.

Those who have examined the tax mechanics note that the levy applies uniformly to revenue, which removes the usual buffer that loss-making businesses receive in other sectors; the Korea Casino Association therefore positioned its July 2026 statement as a request for measured policy adjustments rather than an immediate rate increase that could tip marginal properties into insolvency.

Conclusion

The Korea Casino Association’s response to the Ministry of Culture, Sports and Tourism proposal centers on the risk of accelerated bankruptcies, the unique revenue-based tax burden, and the need to balance fund collection goals with operator viability; the package that raises the levy to 15 percent while introducing five-year renewals and stricter ownership rules continues to receive industry input as of July 2026, with the KRW219.5 billion tourism fund total from 2025 serving as a reference point for current collections. Statement on proposed tourism levy increase (July 2026)