24 Jul 2026
South Korea Foreigner-Only Casinos Confront Proposed Tourism Levy Rise to 15 Percent
The Korea Casino Association has issued a direct warning that raising the maximum tourism levy from 10 percent to 15 percent of revenue would accelerate bankruptcies among operators still recovering from pandemic losses, and the group tied this concern to additional regulatory shifts including five-year license renewal cycles.
Observers note that the proposed changes target the 17 foreigner-only casinos in South Korea, and these venues already operate under unique tax structures that apply levies directly to revenue even during periods of financial loss, which differs from many other industries where taxes align with profitability.
Details of the Proposed Changes and Industry Response
According to the association's statement released in July 2026, the levy increase combined with shorter license periods would compound existing financial pressures, and data from the group shows that roughly half of the operators have recorded annual deficits over the past decade despite ongoing efforts to stabilize operations post-COVID-19.
The association highlighted record contributions of KRW219.5 billion in 2025, a figure that represents a 61.7 percent increase from 2019 levels, yet emphasized that these payments occurred while many facilities continued to face structural challenges from revenue-based taxation regardless of net results.
Financial Pressures on Operators
Operators in this segment pay the tourism levy on gross revenue, which means the charge persists even when costs exceed income, and this mechanism has drawn attention because it creates ongoing outflows during recovery phases when visitor numbers remain below pre-pandemic benchmarks.
Those who've examined the sector's records point out that the combination of fixed regulatory costs and variable revenue creates narrow margins, whereas other tourism-related businesses often benefit from loss carryforwards or adjusted tax bases that cushion downturns.
Industry reports from July 2026 indicate that the five-year license renewal proposal would require operators to undergo more frequent compliance reviews, and this adjustment could raise administrative expenses at a time when capital remains allocated toward rebuilding infrastructure and marketing to international visitors.
Historical Context and Contribution Figures
Over the decade leading into 2026, approximately half the foreigner-only casinos posted yearly shortfalls according to association figures, and this pattern persisted even as the group delivered rising tourism levies that reached KRW219.5 billion in 2025.
The 61.7 percent growth in contributions since 2019 reflects expanded operations and higher visitor spending in certain periods, yet the association stressed that these gains have not translated into consistent profitability for all members because the levy calculation does not account for operational deficits.
Regulatory bodies and trade organizations have received the association's submission, and the group continues to advocate for structures that align levies more closely with net performance during extended recovery windows.
Potential Impacts on the Sector
If implemented, the 15 percent maximum rate would increase the financial burden on venues that already navigate high fixed costs and fluctuating international tourism flows, and analysts tracking the sector note that several operators have only recently returned to positive cash flow after multiple years of pandemic-related restrictions.
The association's position centers on preserving the viability of these 17 facilities, which serve exclusively foreign visitors and contribute directly to tourism revenue through the existing levy system without competing against domestic gambling markets.
Conclusion
The Korea Casino Association's July 2026 warning outlines specific risks tied to the levy adjustment and license renewal changes, and the data presented includes both the KRW219.5 billion contribution total and the decade-long pattern of deficits affecting roughly half the operators. Government consideration of these inputs will determine whether the proposed framework moves forward in its current form or incorporates adjustments that address the revenue-based taxation concerns raised by the group.