Association Issues Direct Warning on Revenue-Based Levy

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, and this change could accelerate bankruptcies for operators still recovering from COVID-19 impacts while the group emphasized that casinos face unique taxation on revenue even during loss-making periods unlike other sectors taxed solely on profits.

Operators have highlighted how the current structure already places pressure on facilities that generate no taxable profits yet must still remit the levy based on gross revenue, and the proposed hike would compound these challenges at a time when visitor numbers and recovery remain uneven across the industry.

Details of Proposed Changes and Competitiveness Concerns

Additional proposals include shifting to five-year license renewals, a move the association criticized for reducing operational flexibility and harming the sector’s ability to compete with regional rivals in places like Macau, Singapore, and the Philippines where regulatory frameworks often allow longer stability periods for investors.

Those who have studied the industry note that frequent renewals introduce uncertainty that can deter capital investment, while the revenue-based levy continues regardless of whether an operator posts net losses in any given quarter or fiscal year.

Recovery Context Following COVID-19 Disruptions

Many foreigner-only casinos in South Korea continue to navigate post-pandemic recovery, with revenue streams still rebuilding from extended closures and travel restrictions that lasted several years, and data from industry reports shows that several facilities have yet to return to pre-2020 performance levels.

Observers note that the levy applies uniformly across operators regardless of individual financial performance, which means even facilities operating at a loss must allocate 10 percent of revenue immediately, and an increase to 15 percent would raise that fixed obligation proportionally without regard to profitability.

Comparative Taxation Framework Across Sectors

Unlike most industries where taxation occurs on net profits after expenses and losses are accounted for, the casino levy structure bases payments directly on gross revenue, and this distinction forms the core of the association’s argument against the proposed adjustment.

Industry analysts have pointed out that this revenue-based approach remains rare outside gaming and hospitality sectors with specific tourism mandates, yet it creates predictable cash flow demands that persist through downturns such as those experienced during the pandemic.

Regional Competition and License Renewal Implications

The association further argued that five-year license renewal cycles would place South Korean operators at a disadvantage against competitors in neighboring jurisdictions that offer extended or more predictable licensing arrangements, and such differences can influence where international operators choose to expand or maintain existing investments.

Those familiar with the regulatory landscape indicate that shorter renewal periods increase administrative burdens and introduce periodic uncertainty that may affect long-term planning for facility upgrades and marketing initiatives aimed at foreign visitors.

Conclusion

The Korea Casino Association’s warning centers on the combined effects of the proposed levy increase and license changes, both of which would apply specifically to foreigner-only casino operators still working through post-COVID recovery, and the group’s statement underscores the structural differences between revenue-based levies and profit-based taxation used in other parts of the economy. The full details appear in the original reporting from ASGAM. Further developments on these proposals remain under review by relevant authorities as of July 2026.