Korea Casino Association Warns of Potential Bankruptcies from Tourism Levy Hike

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, has issued a direct warning that raising the maximum tourism levy from 10 percent to 15 percent of revenue would accelerate financial strain for businesses still emerging from pandemic losses, and the group paired this concern with objections to five-year license renewal cycles plus other regulatory shifts under discussion in July 2026.

Details of the Proposed Levy Changes

Under the current structure operators pay the tourism levy based on gross revenue regardless of whether they report profits or losses for the year, a mechanism the association describes as unique among South Korean industries and one that compounds difficulties when visitor numbers remain below pre-pandemic levels; the proposed increase would apply this levy at the higher rate while operators continue to navigate recovery, and the association noted that roughly half of its members have recorded annual deficits in each of the past ten years.

The five-year license renewal requirement would replace the existing longer-term approvals, creating additional administrative and financial uncertainty for companies that must invest in facilities and marketing to attract international visitors; observers familiar with the industry note that such shortened cycles often coincide with periods when operators need stability to rebuild visitor traffic.

Impact on Post-COVID Recovery

Many foreigner-only casinos have operated at reduced capacity since the pandemic, and the association emphasized that a higher levy applied to revenue would reduce funds available for staff retention, facility upgrades, and marketing campaigns aimed at restoring international arrivals to earlier volumes; data from the past decade shows persistent deficits for approximately half the operators, underscoring how revenue-based levies create cash-flow pressure even in years when expenses exceed income.

Association statements released in July 2026 outlined specific scenarios in which the combined effect of the levy increase and shorter license terms could push marginal operators toward insolvency, particularly those located outside major tourist hubs where visitor recovery has been slowest; the group called for continued dialogue with regulators to balance tourism development goals with sustainable operating conditions for existing licensees.

Industry Context and Levy Structure

South Korea maintains a dual casino system that separates facilities serving domestic visitors from those restricted to foreign passport holders, and the tourism levy applies exclusively to the foreigner-only segment as a mechanism to channel gaming revenue toward national tourism promotion; because the levy is calculated on revenue rather than profit, operators pay the charge in loss-making years, a feature the association argues places the sector at a disadvantage relative to other tourism-related businesses that face different tax treatments.

Figures released alongside the association’s statement show the 2025 contribution total of KRW219.5 billion already exceeded the 2019 benchmark by a substantial margin, yet the same data set revealed ongoing annual deficits for nearly half the members across the preceding decade, illustrating the narrow margins that characterize much of the foreigner-only casino market.

Conclusion

The Korea Casino Association’s July 2026 statement frames the proposed tourism levy increase and related regulatory adjustments as immediate risks to the financial viability of South Korea’s foreigner-only casino operators, while simultaneously documenting the sector’s record KRW219.5 billion contribution in 2025 and its persistent pattern of deficits for roughly half its members over the past ten years; the group’s position centers on preserving operating conditions that allow continued recovery and sustained support for national tourism objectives.