South Korea Casino Operators Warn of Bankruptcy Risks from Proposed Tourism Levy Increase

The Korea Casino Association has issued a direct warning that raising the mandatory tourism levy from 10 percent to 15 percent of revenue would accelerate financial strain on foreigner-only casino operators still recovering from the pandemic era, and the group points to persistent annual deficits across roughly half of its members over the past decade as evidence that the revenue-based structure differs sharply from profit-based taxes applied elsewhere in the economy.

Details of the Proposed Changes

The Ministry of Culture, Sports and Tourism put forward the levy adjustment alongside plans for five-year license renewals and tighter ownership regulations, with the association arguing that the timing adds pressure at a moment when operators continue to rebuild visitor numbers and stabilize cash flow after extended closures and travel restrictions.

Chairman Choi Sung-wook and other representatives emphasized that the levy functions as a fixed percentage of gross revenue regardless of profitability, a mechanism the group contrasts with standard corporate taxation that accounts for operating costs and net results, and they noted the collected fund reached a record KRW219.5 billion in 2025, a 61.7 percent rise from the 2019 total.

Industry Recovery Context

Operators have reported that visitor inflows have only partially returned to pre-pandemic levels, and the revenue-based levy continues to extract funds even during periods of thin margins or outright losses, which the association says leaves limited room for reinvestment in facilities or marketing that might support long-term viability.

Data from the past ten years shows approximately half the operators posting annual deficits, a pattern the association links to structural factors such as high fixed costs and dependence on international tourism rather than domestic spending, and the proposed hike would compound those existing challenges according to the group's public statement.

Financial Figures and Levy Collection Trends

The KRW219.5 billion collected in 2025 marks the highest amount recorded since the levy system began, reflecting both higher revenues at some properties and the cumulative effect of the existing 10 percent rate, yet association members maintain that these inflows have not translated into sustained profitability for the broader sector.

Under the current framework the levy supports tourism promotion initiatives, while the ministry's proposal would increase the rate to 15 percent and introduce longer license terms that some operators view as potentially beneficial for planning, although the association contends the net financial impact would outweigh any administrative gains.

Regulatory and Ownership Implications

Stricter ownership rules form part of the ministry package, and the association has called for further dialogue on how these changes would interact with the higher levy, noting that revenue-based assessments leave operators exposed during downturns without the flexibility profit-based systems provide in comparable industries.

Those who have tracked the sector's post-COVID path observe that several properties have only recently resumed full operations, and any abrupt increase in mandatory contributions could reduce capital available for maintenance, staff retention, or expansion projects already underway.

Conclusion

The Korea Casino Association's warning centers on the specific risk that a 15 percent tourism levy would hasten bankruptcy proceedings for operators facing ongoing deficits, while the ministry's proposal pairs the rate change with five-year renewals and ownership adjustments, leaving the sector awaiting further details on implementation timelines and potential adjustments to the revenue-based formula.