Korea Casino Association Warns of Casino Bankruptcies if Tourism Levy Raised to 15% of Revenue

The Korea Casino Association, which represents South Korea’s foreigner-only casino operators, issued a warning in July 2026 about a proposed increase in the mandatory tourism levy that would raise the rate from 10% to 15% of revenue and accelerate bankruptcy risks for operators still recovering from COVID-19 effects while the group pointed out that casinos face unique taxation on revenue even during loss-making periods unlike other sectors that pay taxes only on profits and the association also criticized plans for five-year license renewals that would reduce competitiveness against regional rivals.

Details of the Proposed Levy Change

Under the current framework the tourism levy stands at 10% of revenue for these foreigner-only facilities and the suggested adjustment would lift that figure to 15% creating an immediate and ongoing financial burden according to the association’s statement and observers note that this shift arrives at a time when many operators continue to rebuild visitor numbers and stabilize cash flows following the pandemic disruptions that closed borders and halted international travel for extended periods.

Unique Taxation Structure for Casinos

Casinos in this category operate under rules that require payment of the levy based on gross revenue regardless of whether the business records an overall profit or loss and this approach differs sharply from standard corporate taxation applied elsewhere in the economy where liabilities arise only after profits are calculated and the association highlighted this distinction as a core reason why further increases would compound existing recovery challenges rather than allow operators room to stabilize.

Additional Concerns Over License Renewals

Alongside the levy proposal the association addressed plans to shorten license renewal cycles to five years and members argued that such a change would introduce uncertainty into long-term planning while regional competitors in nearby markets maintain more predictable regulatory environments that attract investment and talent more effectively and data from industry reports shows that stable licensing periods support sustained development of facilities and marketing efforts aimed at international visitors.

Those who have tracked the sector over recent years often find that frequent renewal requirements create administrative overhead and potential disruptions to operations at a moment when operators need focus on revenue recovery and the association connected this issue directly to broader competitiveness concerns noting that neighboring jurisdictions continue to adjust policies in ways that draw high-value tourism away from South Korean venues.

Recovery Context After COVID-19

Many foreigner-only casinos in South Korea experienced sharp revenue declines during the pandemic years when travel restrictions limited access for the primary customer base of international visitors and although some rebound has occurred the pace remains gradual and the association indicated that an added 5% levy on revenue would remove resources that could otherwise support staffing, maintenance, and promotional activities essential for sustained growth.

Figures referenced in the association’s communication illustrate how revenue-based levies continue regardless of monthly or quarterly results and this structure places ongoing pressure on facilities that have not yet returned to pre-pandemic performance levels while other industries benefit from profit-based calculations that provide relief during lean periods and the group emphasized that this difference in treatment merits careful review before any rate adjustments move forward.

Regional Competitiveness Factors

South Korea’s casino operators compete with venues across Asia that often operate under tax regimes and licensing terms viewed as more favorable and the association stated that raising the tourism levy combined with shorter renewal cycles would widen that gap and potentially shift visitor spending toward markets with lower effective costs and greater regulatory predictability and analysts tracking tourism flows have documented similar shifts in past policy changes elsewhere in the region.

Operators represented by the association maintain that current conditions already test financial resilience and any increase in mandatory payments tied directly to revenue would accelerate the timeline toward insolvency for some properties that are still managing debt and rebuilding reserves after the extended closure periods and the statement urged policymakers to consider these dynamics when evaluating the full set of proposed regulatory adjustments.

Conclusion

The Korea Casino Association’s July 2026 statement outlines specific risks tied to the proposed tourism levy increase and related licensing changes and the group’s position centers on the revenue-based taxation model that applies even during unprofitable periods along with the need for stable regulatory frameworks to support recovery and maintain standing against regional alternatives and further details on the association’s position appear in coverage from industry outlets.