South Korean Foreigner-Only Casinos Highlight Record Fund Payments While Opposing Levy Expansion to 15 Percent
The Korea Casino Association issued a direct warning in July 2026 that raising the maximum levy to the Tourism Promotion and Development Fund from 10 percent to 15 percent of revenue would accelerate financial strain on foreigner-only casino operators still rebounding from pandemic losses, and the group pointed out that these businesses remain the only sector required to pay the levy even during periods of net losses while also noting their record contribution of KRW219.5 billion in 2025 which marked a 61.7 percent increase over the KRW135.7 billion paid in 2019.
Operators represented by the association emphasized that the proposed change arrives at a critical recovery stage when many properties continue to manage elevated operating costs and uneven visitor flows, and they argued the higher rate would reduce available capital needed for facility upgrades and staff retention programs that have supported gradual revenue stabilization since 2022.
Details of the Proposed Levy Adjustment
Under the current structure the levy applies strictly to gross revenue regardless of profitability, which means loss-making casinos still transfer 10 percent of every won earned to the fund, and the association stated that lifting the cap to 15 percent would compound this obligation at a time when several properties report thin margins after years of restricted international travel, while the government considers parallel measures that include shortening license renewal cycles to five years and introducing tighter ownership disclosure requirements.
Those additional proposals drew separate objections because shorter renewal periods could increase administrative uncertainty for long-term investment planning, and stricter ownership rules might limit access to fresh capital from overseas partners that have historically supported expansion and modernization projects at multiple sites across the country.
Record Contributions and Sector Comparisons
Figures released alongside the warning show the foreigner-only casino segment delivered KRW219.5 billion to the Tourism Promotion and Development Fund in 2025, representing the highest annual total on record and a 61.7 percent jump from the KRW135.7 billion contributed in 2019 before the pandemic disrupted operations, and association representatives noted that these payments occurred even as some operators posted net losses yet still met the revenue-based obligation that no other tourism-related industry faces under the same terms.
Observers tracking the industry point out that this consistent revenue stream has helped finance broader tourism infrastructure projects nationwide, yet the same data also illustrates how the levy functions as a fixed percentage of top-line earnings rather than a share of profits, which creates a structural difference compared with tax treatments applied to hotels, theme parks, and transportation services that typically calculate obligations after expenses.
Potential Impacts on Recovery Timelines
Association statements outlined that an immediate increase to 15 percent would divert an additional 5 percent of revenue away from operational budgets at facilities that have only recently returned to pre-pandemic visitor volumes, and this shift could delay planned renovations, limit marketing campaigns aimed at high-value international guests, and reduce resources available for compliance with evolving responsible gaming standards that regulators continue to refine.
Because the levy applies uniformly across all revenue-generating activities, properties with higher fixed costs for security, surveillance, and VIP hosting services would experience proportionally larger reductions in retained earnings, while smaller or mid-tier operators might face accelerated pressure to consolidate or seek government support packages that have not been outlined in the current proposal drafts.
Opposition to Related Regulatory Changes
Besides the levy adjustment the association also registered opposition to shortening license renewal intervals to five years, noting that longer cycles have historically allowed operators to secure multi-year financing agreements and coordinate large-scale construction timelines without repeated regulatory reviews, and they further argued that stricter ownership rules could discourage institutional investors who require predictable governance frameworks before committing capital to regulated gaming assets in the region.
These combined concerns were presented as interconnected risks because frequent license reviews paired with higher ongoing levies could collectively reduce the attractiveness of South Korea's foreigner-only casino market relative to competing destinations that maintain more stable fiscal and licensing environments for international operators.
Conclusion
The Korea Casino Association's July 2026 statement centers on three core points: the proposed levy rise from 10 percent to 15 percent of revenue, the sector's unique status of paying on gross earnings even during loss-making periods, and the record KRW219.5 billion contribution already delivered in 2025, while the group simultaneously objects to five-year license renewals and tighter ownership requirements that could add further operational complexity, and these positions reflect the current financial landscape for operators managing post-pandemic recovery under existing contribution rules.