South Korea Casino Operators Raise Alarm Over Tourism Levy Proposal in July 2026
The Korea Casino Association has issued a direct warning about a Ministry of Culture, Sports and Tourism proposal that would raise the tourism levy from 10 percent to 15 percent of revenue for South Korea's foreigner-only casino operators, and the group states this change would accelerate bankruptcies among facilities still recovering from COVID-19 impacts while the same proposal introduces five-year license renewals along with stricter ownership rules.
Data collected by the association shows the industry has operated under a unique tax structure that levies fees on revenue even during periods of loss, and approximately half of all operators have recorded annual deficits over the past decade according to figures released in the July 2026 statement.
Details of the Proposed Changes
Under the current framework the tourism levy stands at 10 percent of revenue with collections reaching a record KRW219.5 billion for the tourism fund in 2025, yet the ministry's plan would increase that rate to 15 percent while shifting license terms to five-year renewal cycles and adding tighter requirements on ownership structures that operators must meet to maintain their foreign-only status.
Association representatives noted that revenue-based taxation continues regardless of profitability, which creates ongoing pressure for properties posting consistent shortfalls, and they highlighted that roughly half the operators have carried deficits in each of the last ten years based on internal industry tracking.
Industry Recovery Context
Casinos serving only foreign visitors began reopening after pandemic restrictions lifted yet many facilities still carry debt from extended closures, and the proposed levy increase arrives at a moment when several properties report ongoing challenges in returning to pre-2020 visitor volumes while government collections from the existing 10 percent rate already hit the KRW219.5 billion mark last year.
Observers tracking the sector point out that the combination of revenue taxation during loss-making years and the new proposed rate would compound financial strain, particularly for smaller operators that lack diversified revenue streams beyond table games and slot machines reserved for non-Korean nationals.
Association Position on Levy and Licensing
The Korea Casino Association argues that raising the levy to 15 percent would push multiple facilities toward bankruptcy because the tax applies to gross revenue rather than net profit, and this structure already contributes to the pattern of deficits seen in half the operators across the previous decade while the record KRW219.5 billion collected in 2025 demonstrates the fund's current strength under the existing rate.
License renewal terms shifting to five-year cycles would require operators to demonstrate compliance with new ownership rules at each interval, and association members state these added administrative layers could further delay recovery efforts for properties working to stabilize operations after the pandemic period.
Those monitoring regulatory developments note that the ministry's proposal bundles the levy increase with licensing reforms, creating a single package that operators must address together rather than through separate negotiations, and the July 2026 Statement on proposed tourism levy increase outlines specific examples of how the revenue tax applies even when annual results show losses.
Financial Pressures Highlighted by Data
Industry statistics reveal that the foreigner-only casino segment has faced consistent challenges with profitability, and the association's review of ten-year records shows deficits at roughly half the properties in most years while revenue-based levies continue to be paid regardless of those results.
The KRW219.5 billion collected for the tourism fund in 2025 represents the highest total under the current 10 percent rate, yet association calculations project that a move to 15 percent would extract additional funds at a time when visitor recovery remains incomplete for many locations still carrying pandemic-related debt.
Experts following the regulatory process indicate the proposed five-year license cycle would replace existing renewal procedures and introduce stricter ownership criteria that could limit flexibility for operators seeking new investment or restructuring during the recovery phase.
Conclusion
The Korea Casino Association's July 2026 warning centers on the direct link between the proposed tourism levy increase, the existing revenue-based taxation model, and the financial sustainability of foreigner-only casinos still emerging from COVID-19 effects, while the bundled licensing reforms add further requirements that operators must navigate under the new framework.