South Korean Foreigner-Only Casinos Face Warnings Over Tourism Levy Hike and License Reforms

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, issued a statement in July 2026 highlighting risks tied to a Ministry of Culture, Sports and Tourism proposal that would raise the tourism levy from 10 percent to 15 percent of revenue while introducing five-year license renewals along with stricter ownership rules, and the association noted that such changes could accelerate bankruptcies for properties still recovering from the COVID-19 downturn because operators already face unique taxation on gross revenue even during loss-making periods.

Half of the operators have posted annual deficits across the past decade according to data shared by the association, yet collections for the tourism fund reached a record KRW219.5 billion in 2025, which shows the scale of contributions already flowing from the sector under existing rates.

Details of the Ministry Proposal

The Ministry of Culture, Sports and Tourism has outlined a package that lifts the levy applied to revenue, sets license terms at five years instead of the current structure, and tightens rules around ownership stakes, and these elements together form the core of the update that the association says would add pressure at a time when many properties continue to rebuild visitor numbers and stabilize cash flow after pandemic closures.

Operators in this foreigner-only segment pay the levy directly on revenue regardless of profitability, which differs from standard corporate taxation models and has contributed to persistent deficits for roughly half the group over ten years even as the tourism fund collected record amounts last year.

Current Financial Pressures on Operators

Many casinos in the segment entered the post-COVID period with accumulated losses and reduced reserves, and the association emphasized that an increase to 15 percent would compound those challenges because revenue-based taxation continues regardless of whether properties achieve positive margins in any given year.

While collections hit KRW219.5 billion in 2025, the underlying data shows that sustained deficits have affected operators across multiple annual cycles, leaving limited room for additional levies without risking further closures or ownership shifts that stricter rules might also influence.

Association Position on Potential Outcomes

The Korea Casino Association stated that the combined effect of the higher levy, shorter renewal cycles, and ownership restrictions could hasten bankruptcies because facilities still rebuilding from COVID-19 restrictions lack the financial buffer to absorb the extra cost while meeting new compliance requirements, and the group pointed to the decade-long pattern of deficits as evidence that the current 10 percent rate already strains viability for numerous members.

Those who have tracked the sector note that revenue taxation applies uniformly, which means even loss-making casinos contribute to the tourism fund, and this structure has supported record collections while simultaneously leaving about half the operators in deficit each year over the past ten years.

Taxation Model and Historical Performance

Unlike profit-based systems, the levy on gross revenue means operators remit funds to the tourism pool whether they finish the year in surplus or shortfall, and this approach has produced KRW219.5 billion in 2025 collections at the same time that persistent deficits have affected a significant portion of the foreigner-only group.

The association highlighted these figures to illustrate that the existing framework already places unique demands on the industry, and any move to 15 percent would increase those demands during a recovery phase that began after pandemic-related shutdowns limited international arrivals for extended periods.

License Renewal and Ownership Provisions

Under the proposed changes, licenses would require renewal every five years rather than following prior longer cycles, which adds administrative and compliance costs, while stricter ownership rules could limit investment options for operators seeking fresh capital to offset ongoing deficits.

The association warned that these provisions, taken together with the levy increase, would create additional hurdles for properties that have not yet returned to consistent profitability after COVID-19, and the group tied its concerns directly to the revenue-based taxation model that continues regardless of annual results.

Conclusion

The Korea Casino Association’s July 2026 statement centers on the risk that raising the tourism levy to 15 percent of revenue, alongside five-year renewals and tighter ownership standards, would speed bankruptcies among foreigner-only casinos still emerging from COVID-19 impacts, and the group supported its position with data showing half the operators have carried deficits over the past decade even as the sector delivered record KRW219.5 billion in tourism fund collections for 2025. Statement on proposed tourism levy increase (July 2026)