South Korea Foreigner-Only Casinos Warn of Bankruptcy Risks From Tourism Levy Hike

The Korea Casino Association, representing South Korea’s foreigner-only casino operators, issued a 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 the group pointed out that these venues face unique taxation on revenue even during periods of operating losses.

Observers note that the association tied its concerns directly to the ongoing recovery process, where many facilities continue to rebuild visitor numbers and stabilize finances after extended closures and travel restrictions in prior years, while the proposed change would apply across all revenue regardless of profitability.

Details of the Proposed Levy Adjustment

The tourism levy functions as a mandatory contribution calculated as a percentage of casino revenue, and the current cap sits at 10 percent, yet the suggested revision would raise that threshold to 15 percent, creating an immediate increase in financial obligations for operators who already pay into the fund even when annual results show net losses, and this structure differs from standard corporate taxation models applied to most other industries in the region.

Those familiar with the sector explain that revenue-based taxation means payments occur irrespective of whether expenses exceed income in a given period, which places additional pressure on facilities navigating post-pandemic challenges such as fluctuating international arrivals and higher operational costs for health protocols and staffing.

Record Collections in the Tourism Fund

Figures reveal that the tourism fund collected KRW219.5 billion in 2025, representing a 61.7 percent rise compared to 2019 levels, and the association referenced these record amounts while arguing that the existing contributions already provide substantial support without requiring further rate adjustments at this stage of industry recovery.

Data indicates the growth stems from increased activity across contributing sectors, yet the Korea Casino Association emphasized that casinos alone bear the burden of revenue taxation during loss-making years, unlike many other tourism-related businesses that pay based on profits or different metrics, and this distinction forms a core part of the current objections.

What's interesting is how the association connected the levy proposal to broader competitiveness issues, noting that neighboring markets maintain lower or differently structured contributions, which allows operators there greater flexibility during economic rebounds, and the group highlighted that five-year license renewal cycles plus stricter ownership regulations would compound the effects by limiting long-term planning and investment options.

Additional Regulatory Proposals Under Scrutiny

The Korea Casino Association also criticized plans for shorter license terms limited to five years along with tighter ownership restrictions, stating these measures would reduce the ability of South Korean casinos to compete effectively against regional rivals that offer more stable regulatory environments, and the combined impact of higher levies with these changes could accelerate financial strain for multiple properties.

Researchers tracking Asian gaming markets have observed that ownership rules influence capital inflows and partnership formations, while shorter renewal periods introduce uncertainty that affects expansion decisions, and the association presented these points as interconnected factors that collectively threaten the pace of post-COVID stabilization for foreigner-only venues.

Context of Post-Pandemic Recovery

Casinos covered by the association continue to operate under the revenue taxation model established prior to the pandemic, and the warning issued in July 2026 underscores that many facilities have not yet returned to pre-2020 performance benchmarks despite the tourism fund reaching new highs, and this gap between fund collections and operator profitability remains a central element in the current discussion.

People involved in the sector note that international visitor recovery has progressed unevenly across properties, with some locations still managing reduced capacity or higher fixed costs related to compliance and marketing, and the proposed levy increase would apply uniformly without adjustments for individual financial positions.

Industry Positioning Against Regional Competitors

According to Singapore Tourism Board analyses on integrated resort performance, operators in nearby jurisdictions benefit from taxation frameworks that account for profitability thresholds, and the Korea Casino Association referenced similar models when outlining why the 15 percent revenue levy could erode South Korea’s position in attracting high-value foreign players.

Evidence from regional comparisons shows that consistent regulatory predictability supports faster capital recovery after disruptions, whereas frequent adjustments to contribution rates and licensing conditions create headwinds, and the association positioned its July 2026 statement as a call to maintain the existing 10 percent cap while preserving longer license durations and current ownership standards.

Conclusion

The Korea Casino Association’s July 2026 warning centers on the combined effects of the proposed tourism levy increase, continued revenue-based taxation during losses, record fund collections, and additional regulatory proposals that the group believes would collectively impair competitiveness, and stakeholders continue to review these elements against the backdrop of ongoing recovery from pandemic impacts, with the association advocating for retention of the current levy structure to support sustained operations across South Korea’s foreigner-only casino sector.