South Korean Tourism Coalition Calls for Reversal of Casino Levy Hike Proposal

A coalition of 12 South Korean tourism organizations including the Korea Casino Association, Korea Tourism Association, Korea Hotel Association and Korea Association of Travel Agents released a joint statement on August 3 urging the Ministry of Culture, Sports and Tourism to withdraw a proposed casino industry reform and observers note the groups represent a broad cross-section of the sector that has long contributed to national tourism goals.

The statement outlines specific objections to the plan that would increase the levy on foreigner-only casino operators from 10 percent to 15 percent of gaming revenue on top of existing taxes while the organizations argue this additional burden could trigger bankruptcies and cut profits by an estimated 20 to 37 percent across affected properties.

Details of the Proposed Reform

Under the reform the higher levy would apply exclusively to foreigner-only casino operators and the ministry has not yet confirmed whether integrated resort projects currently in planning stages would face similar requirements although the coalition highlights that such uncertainty already deters potential investors from committing capital to large-scale developments that typically require years of financial forecasting.

Those who have studied the industry point out that the additional 5 percent levy would compound existing tax obligations and create a cumulative load that some smaller operators may struggle to absorb without reducing staff or limiting operations and the joint statement references internal projections showing profit erosion at the higher end of the 20 to 37 percent range for properties with thinner margins.

Concerns Over Investment and Operations

The coalition emphasizes that future integrated resort investments could face significant barriers if the new levy structure takes effect because developers evaluate regulatory stability and tax predictability before committing billions in construction and operational costs and South Korea has positioned itself as an emerging destination for foreign visitors who contribute to casino revenues without accessing domestic gambling markets.

Experts have observed that raising the levy risks shifting investment to neighboring jurisdictions where tax regimes remain more favorable and the organizations note that several planned projects already face delays due to financing challenges that could worsen under the proposed changes.

Record Contributions to Tourism Fund

The groups highlight that the tourism fund already received a record KRW219.5 billion equivalent to approximately US$153 million from casinos in 2026 and they argue this figure demonstrates the sector's substantial existing support for national tourism initiatives without the need for an increased levy and data from the fund shows consistent year-over-year growth in contributions tied directly to casino performance.

Observers note the record contribution occurred despite global travel fluctuations and the organizations point to this achievement as evidence that the current 10 percent levy has enabled both operator profitability and strong fund inflows and they suggest maintaining the existing rate would sustain this balance while allowing continued expansion of tourism-related infrastructure.

Industry Context and Stakeholder Positions

The Korea Casino Association and its partner groups have coordinated responses to regulatory proposals in the past and this latest statement reflects unified concern across hotel operators, travel agents and casino management that the reform could reduce overall tourism revenue rather than increase it and the coalition has requested direct consultations with ministry officials before any final decisions are made.

Those who've examined similar levy changes in other markets indicate that abrupt tax increases often lead to reduced capital expenditure on property upgrades and marketing which in turn affects visitor numbers and the South Korean organizations reference these patterns when warning about potential long-term effects on the broader tourism economy that extends beyond casino floors to hotels, restaurants and transportation services.

Conclusion

The joint statement issued on August 3 marks a coordinated effort by the 12 organizations to influence policy direction on casino taxation and the ministry has not yet issued a formal response to the request for withdrawal of the proposed reform while the sector continues to monitor developments that could reshape operational costs for foreigner-only operators across the country.