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

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, issued a statement in July 2026 warning that a proposed rise in the mandatory tourism levy from 10% to 15% of revenue would accelerate bankruptcies among operators still recovering from COVID-19 impacts, and the group emphasized that this change comes at a time when many facilities continue to face uneven visitor flows and elevated operating costs.

Casinos in this category operate under rules that require them to pay the levy based on gross revenue regardless of whether they report profits or losses, a system that stands apart from most other industries taxed solely on net earnings, and the association noted this distinction creates ongoing pressure during periods of low occupancy or high promotional spending aimed at attracting international visitors.

Details of the Levy Proposal and Industry Response

Under the current framework the levy funds tourism promotion initiatives, yet the suggested adjustment would lift the rate by five percentage points and apply it directly to revenue figures, a move the association argues would reduce available capital for facility upgrades and marketing campaigns that have proven essential for post-pandemic rebound, while the group pointed to data showing several operators have yet to return to pre-2020 revenue levels in key months.

Those who have reviewed the proposal observe that the higher rate would apply uniformly across all foreigner-only venues, including smaller properties that lack the scale advantages of larger integrated resorts, and the association highlighted examples where similar tax structures in other jurisdictions led to accelerated closures when revenue-based fees remained fixed during downturns.

Recovery Context Following COVID-19

Foreigners-only casinos in South Korea have relied on gradual reopening of international travel routes and targeted promotions to rebuild visitor numbers since 2022, yet many properties still report revenue shortfalls that leave them vulnerable to fixed-percentage fees applied even in loss-making quarters, and the association documented cases where facilities have deferred maintenance or reduced marketing budgets to preserve cash flow amid these conditions.

Data referenced in the statement shows that several operators recorded net losses in recent reporting periods while still remitting the existing 10% levy, a pattern that would intensify under the 15% rate and potentially force asset sales or operational cutbacks that further slow the sector’s return to stability, whereas other tourism-related businesses typically receive tax relief tied to profitability metrics during similar recovery phases.

Competitive Position Against Regional Markets

South Korea’s foreigner-only casinos compete directly with integrated resorts in nearby countries that offer more flexible tax arrangements and longer license durations, and the association argued that the proposed changes would widen this gap by increasing the cost base without corresponding improvements in visitor access or infrastructure support, thereby shifting market share toward venues in jurisdictions with lower revenue-based levies.

Observers note that maintaining current levy rates and extending license terms could help preserve employment and tourism revenue contributions from the sector, which continues to draw high-spending international guests even as domestic restrictions limit broader access, and the group called for policy adjustments that align taxation more closely with profitability to avoid hastening financial distress among recovering operators.