South Korea Foreigner-Only Casinos Confront Levy Proposal Amid Post-Pandemic Recovery

The Korea Casino Association issued a direct warning in July 2026 about a proposed tourism levy increase that would raise the rate from 10 percent to 15 percent of revenue for South Korea’s foreigner-only casino operators, and this change could accelerate bankruptcies among properties still recovering from COVID-19 effects. The Ministry of Culture, Sports and Tourism advanced the plan which also calls for five-year license renewals along with stricter ownership rules, and association representatives pointed out that the industry faces unique taxation based on revenue regardless of profitability.

Details of the Ministry Proposal

Under the ministry framework the levy would apply uniformly across operators while license terms shift to a five-year cycle and ownership regulations tighten to limit certain structures, and these elements combine with the higher rate to create new financial pressures according to the association statement. Observers note that the proposal arrives at a time when several facilities continue to rebuild visitor numbers and stabilize operations following pandemic disruptions that halted much of the international tourism flow into South Korea.

The association emphasized that casinos pay the levy on gross revenue even during periods of loss, and this structure differs from standard corporate taxation models that typically account for net results, while data shows roughly half of the operators recorded annual deficits across the past decade. Such conditions mean the increased levy would compound existing challenges rather than serve as a temporary adjustment, and the group highlighted record tourism fund collections reaching KRW219.5 billion in 2025 as evidence of substantial prior contributions.

Industry Taxation Structure and Historical Performance

Foreigners-only casinos in South Korea operate under a revenue-based tax regime that requires payments irrespective of profit margins or overall losses, and this approach has led to sustained deficits at many properties over ten years according to association records. The proposal to raise the levy by five percentage points would therefore extract additional funds from operators already posting shortfalls, and the association framed the move as one that risks pushing marginal facilities into insolvency before full recovery takes hold.

Ministry officials have not yet finalized the changes, yet the association presented its position in response to the draft plan circulated in mid-2026, and the statement outlined how the combination of higher levies, shorter renewal periods, and ownership restrictions could reduce operational flexibility. Those who have tracked the sector note that the tourism fund has benefited from strong collections in 2025, yet the association argues the current base already reflects maximum sustainable extraction given revenue-only taxation.

Potential Impacts on Operators and the Tourism Fund

Association leaders stated that several casinos remain in recovery mode with visitor volumes and revenue streams not yet restored to pre-pandemic levels, and an immediate levy hike would remove resources needed for debt servicing, staff retention, and facility maintenance. The five-year license renewal cycle would replace longer terms and introduce more frequent compliance reviews, while stricter ownership rules could limit investment options for operators seeking capital to stabilize finances.

Data from the past decade indicates persistent deficits at approximately half the foreigner-only properties, and the association tied these figures directly to the revenue-based levy that continues regardless of annual results. The record KRW219.5 billion collected for the tourism fund in 2025 demonstrates the scale of existing contributions, yet the group warned that higher rates risk shrinking the overall operator base and thereby reducing future collections if bankruptcies occur.

Operators face the prospect of accelerated financial strain under the combined measures, and the association called for reconsideration of the levy increase specifically because it would apply uniformly without regard to individual property performance. The ministry proposal remains under discussion as of late July 2026, and stakeholders continue to review how the changes would interact with ongoing recovery efforts across the sector.

Conclusion

The Korea Casino Association has outlined clear risks associated with the proposed tourism levy increase to 15 percent of revenue, five-year license renewals, and tighter ownership regulations, and the statement connects these elements to potential bankruptcies among operators still emerging from COVID-19 effects. Figures showing half the properties in deficit over the past decade alongside record 2025 collections of KRW219.5 billion provide context for the association position, while the revenue-based taxation model remains central to the concerns raised. The ministry continues to advance the framework, and the sector now awaits final determinations on how the adjustments will proceed. Statement on proposed tourism levy increase (July 2026)