Korea Casino Association Warns of Potential Bankruptcies Amid Levy Proposal

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 from 10 percent to 15 percent of revenue, noting that such a change would accelerate bankruptcies among operators still recovering from the effects of COVID-19 while the group emphasized that casinos face unique taxation on revenue even during loss-making periods unlike other sectors taxed solely on profits and it also criticized plans for five-year license renewals as factors that would reduce competitiveness against regional rivals.

Details of the Levy Increase Proposal

The proposal targets the tourism levy applied specifically to revenue generated by foreigner-only casinos in South Korea and the association stated that raising this levy from its current 10 percent level to 15 percent would place immediate financial strain on operators who continue to rebuild after pandemic-related closures and reduced visitor numbers and because the levy is calculated on revenue rather than profits it applies regardless of whether an operator records losses in a given period which differs from standard corporate taxation structures in other industries where taxes apply only after profitability is achieved.

Association representatives outlined that this revenue-based approach creates ongoing cash flow challenges during recovery phases since operators must remit the levy even when overall financial performance remains negative and the group pointed to multiple facilities that have yet to return to pre-pandemic revenue levels as evidence that the timing of the increase would compound existing difficulties rather than allow for gradual stabilization.

Unique Taxation Structure for Casinos

Casino operators in this segment operate under rules that require payments based on total revenue collected whereas most other business sectors in South Korea calculate tax obligations against net profits after expenses and the Korea Casino Association highlighted this distinction as a core reason why the proposed hike would affect their members differently from comparable tourism or entertainment businesses and data from industry filings show that several foreigner-only casinos posted losses in recent quarters yet still faced levy obligations that reduced available funds for operational improvements or debt reduction.

Those familiar with the regulatory framework note that the revenue levy functions as a direct percentage deduction from gross intake before any profit calculations occur and this structure means loss-making operators receive no relief from the levy amount which stands in contrast to profit-based systems that adjust automatically during downturns and the association argued that maintaining this model while increasing the rate would limit the ability of facilities to retain capital needed for recovery investments.

License Renewal Changes and Regional Competition

Alongside the levy adjustment the proposal includes shifting license renewals to a five-year cycle and the association indicated that shorter renewal periods would introduce additional uncertainty for operators planning long-term infrastructure or marketing initiatives and such frequent reviews could deter investment compared to jurisdictions in the region that offer longer license terms and greater predictability for foreign operators seeking stable environments.

Regional competitors in places like Singapore, Macau, and parts of Southeast Asia maintain licensing frameworks that extend beyond five years in many cases and the Korea Casino Association stated that this disparity would make South Korean facilities less attractive for international capital and visitor traffic as operators weigh the risks of repeated renewal processes against more stable options elsewhere and figures from tourism reports indicate that cross-border casino visitors often select destinations based on regulatory consistency as much as gaming offerings.

Recovery Context After COVID-19

Foreigners-only casinos in South Korea experienced sharp declines in visitor numbers and revenue during the pandemic period with many facilities reporting prolonged closures or capacity restrictions that persisted into subsequent years and the association noted that recovery remains incomplete for several members as international travel patterns have not fully normalized and the proposed levy increase would arrive while operators continue to manage reduced cash reserves and higher operating costs associated with post-pandemic protocols.

Industry records show that revenue for the segment has grown since the height of restrictions yet remains below earlier peaks in multiple locations and the group emphasized that additional financial burdens at this stage would shorten the timeline before some operators face insolvency proceedings rather than allowing continued gradual improvement through increased visitor inflows and operational adjustments.

Conclusion

The Korea Casino Association presented its position on the combined effects of the higher tourism levy and shorter license renewal terms as elements that together threaten the financial viability of South Korea’s foreigner-only casino operators during their ongoing post-COVID recovery and the group’s statements focused on the revenue-based taxation model as a distinguishing factor that amplifies the impact of the proposed changes compared to other sectors and regional licensing differences as additional competitive disadvantages that could influence future investment decisions and visitor choices.