Korea Casino Association Warns of Potential Bankruptcies Amid Tourism Levy Proposal

The Korea Casino Association, which represents South Korea's foreigner-only casino operators, has issued a direct warning about a proposed increase in the maximum tourism levy from 10% to 15% of revenue, noting that such a change would accelerate bankruptcies for operators still recovering from the COVID-19 pandemic while they navigate ongoing financial pressures in July 2026.

Observers note that the association emphasized casinos remain the only sector subject to levies calculated on revenue even during periods of loss, a structure that distinguishes them from other industries and creates unique cash flow strains when visitor numbers fluctuate or operational costs rise unexpectedly.

Proposed Changes and Industry Response

The Ministry of Culture, Sports and Tourism has advanced the levy hike alongside a five-year license renewal system, and industry representatives have pointed out that the Tourism Promotion and Development Fund already collected a record KRW219.5 billion from casinos in 2025, a figure that stood 61.7% higher than the amount gathered in 2019 before pandemic disruptions took hold.

Those familiar with the sector's recovery trajectory explain that many operators continue to rebuild visitor bases and stabilize revenues after extended closures and travel restrictions, so an elevated levy applied directly to top-line revenue would reduce available capital for maintenance, marketing, and debt servicing at a time when margins remain thin.

Revenue Collection Figures and Sector Distinctions

Data from the fund shows strong growth in collections despite uneven post-pandemic performance, yet the association has highlighted that the revenue-based levy continues regardless of profitability, unlike taxation models applied elsewhere that typically account for net results and allow adjustments during downturns.

Operators have noted that the record KRW219.5 billion collected in 2025 reflects both higher visitor volumes in certain periods and the existing 10% rate, which means any move to 15% would compound the financial load even if revenue growth slows or external factors such as currency fluctuations affect inbound tourism from key markets.

Analysts tracking the industry point out that the proposed five-year license renewal framework would introduce additional administrative cycles, and combined with the higher levy it could create overlapping compliance costs that smaller or mid-sized operators find particularly difficult to absorb while they focus on stabilizing balance sheets.

Recovery Context and Operational Realities

Recovery efforts across South Korea's foreigner-only casinos have centered on restoring international arrivals, upgrading facilities, and managing debt accumulated during low-revenue years, yet the association's statement underscores that these steps require consistent cash retention that a revenue-based levy increase would directly reduce.

Figures reveal the 61.7% jump from 2019 levels occurred amid a rebound in tourism, but representatives argue that future collections at the higher rate could outpace actual profitability improvements, leaving less flexibility for reinvestment or contingency planning when external shocks occur.

Those monitoring regulatory developments note the Ministry's dual proposal ties the levy adjustment to a structured renewal process, which some operators view as an opportunity for clearer long-term planning while others see added layers of review that coincide with higher ongoing payments to the fund.

Conclusion

The Korea Casino Association's warning centers on the specific mechanics of the proposed 15% tourism levy and its interaction with existing revenue-based collection rules, the record KRW219.5 billion already contributed in 2025, and the five-year license renewal system advanced by the Ministry of Culture, Sports and Tourism, all framed against the backdrop of operators' ongoing post-pandemic stabilization efforts in July 2026. Statement on proposed tourism levy increase provides additional context on the association's position and the data cited in its response.