The Korea Casino Association, representing South Korea’s foreigner-only casino operators, issued a formal warning in July 2026 that a proposed increase in the mandatory tourism levy from a 10 percent maximum to 15 percent of revenue would hasten the bankruptcy of casinos still recovering from the COVID-19 pandemic, and observers note the group emphasized how casinos face unique taxation on revenue even when operating at losses while record tourism fund collections reached KRW219.5 billion in 2025, up 61.7 percent from 2019 levels, yet the association also criticized related proposals for five-year license renewals and stricter ownership rules as harming competitiveness versus regional rivals.

Data from industry reports shows the levy applies specifically to these operators, and experts have observed that such taxation structures differ markedly from standard corporate income taxes used elsewhere, while those who've studied the sector point out that revenue-based levies continue regardless of profitability, creating ongoing pressure during periods of reduced visitor numbers and fluctuating exchange rates.

Government discussions around raising the tourism levy coincide with broader regulatory reviews, and the association highlighted how this shift could compound challenges for facilities that depend heavily on international visitors, whereas five-year license renewal cycles would replace longer terms and introduce additional uncertainty, and stricter ownership rules might limit foreign investment that has historically supported expansion projects across the sector.

Figures reveal that tourism fund collections grew substantially between 2019 and 2025, yet association representatives argued the increase stems partly from post-pandemic recovery rather than sustainable growth, and people familiar with the industry note that casinos contribute to these funds through teh levy mechanism even as they navigate higher operational costs and competition from integrated resorts in neighboring countries.

Casinos in this category pay the tourism levy based on gross revenue, and this approach persists during loss-making periods unlike profit-based taxes common in other industries, while researchers discovered through comparative analyses that such models place additional strain when visitor inflows drop due to economic factors or travel restrictions, and the association referenced ongoing recovery efforts since the pandemic lows as evidence that further increases could tip marginal operations into insolvency.

According to statements from the group, the proposed 15 percent rate would apply uniformly, and this uniformity overlooks variations in property scale and market focus, whereas regional competitors in places like Macau and Singapore maintain different tax frameworks that allow greater flexibility during downturns, and data indicates South Korean operators have already adjusted marketing and staffing in response to earlier collection increases.

The association pointed to license renewal proposals and ownership restrictions as additional hurdles, and these elements together could reduce the appeal of South Korean casinos for international operators seeking stable regulatory environments, while comparisons show that nearby jurisdictions often provide longer license periods and more open investment rules that attract capital for facility upgrades and new attractions, and evidence suggests such differences influence where high-value tourists choose to spend time and money.

Industry organizations have tracked similar regulatory shifts in Asia, and one study from a regional research institute revealed how tax and licensing changes affect cross-border player flows, whereas South Korean casinos rely on foreign visitors for the majority of revenue, and the group warned that without adjustments the combination of higher levies and tighter rules might accelerate consolidation or closures among smaller properties still rebuilding visitor bases.

Tourism fund collections hit KRW219.5 billion in 2025, representing a 61.7 percent rise from 2019, and association members noted this growth occurred amid broader economic recovery yet did not translate evenly across all operators, while those monitoring the sector observed that revenue-based contributions continue even when individual casinos report net losses from high fixed costs and marketing expenses, and the warning emphasized how further rate hikes risk reversing recent gains in visitor numbers.

Proposals for five-year renewals drew particular criticism because shorter cycles increase administrative burdens and financing difficulties, and experts have observed that longer terms provide stability needed for long-term planning in capital-intensive businesses, whereas stricter ownership rules could deter partnerships that bring expertise and funding from established international gaming groups, and the association called for balanced approaches that maintain competitiveness without undermining public revenue goals.

The Korea Casino Association's statements in July 2026 underscore the intersection of taxation policy, post-pandemic recovery, and regional competition, and stakeholders continue to review how the proposed levy increase alongside licensing and ownership changes might reshape the foreigner-only casino landscape, while data on collections and operational realities provide context for ongoing discussions about sustainable frameworks that support both industry viability and tourism fund objectives.