South Korea Casino Sector Opposes Regulatory Changes

The Korea Casino Association has urged South Korea’s Ministry of Culture, Sports and Tourism to reconsider proposed amendments to the country’s casino regulations, arguing that the measures would place additional financial pressure on operators and weaken the industry’s competitiveness.

Association Challenges Proposed Levy Increase

In a statement released on Tuesday, the association objected to two key proposals currently under review. The first would raise the maximum contribution to the Tourism Promotion and Development Fund from 10% to 15% of gross gaming revenue, while the second would replace the current permanent casino licence system with renewable five-year permits.

The association argued that calculating the levy on gross gaming revenue rather than operating profit places an unfair burden on casino businesses. It noted that around half of South Korea’s 18 licensed casino operators have reported annual operating losses over the past decade while also paying corporate tax, local taxes and individual consumption tax.

According to the group, increasing the contribution rate could slow the sector’s financial recovery following the COVID-19 pandemic. It also pointed to market reaction, saying casino-related stocks declined on July 15 despite gains in the broader Kospi index.

Concerns Over Five-Year Licence Renewals

The association also criticised the proposal to introduce five-year licence renewals.

It noted that casino licences have remained valid indefinitely since revisions to the Tourism Promotion Act in 1994, provided operators continue to meet regulatory obligations, including tourism fund contributions and operating requirements.

The group warned that replacing the current framework with fixed-term licences could create uncertainty for long-term investment projects and potentially affect employment. It also argued that regulators already have the authority to suspend or revoke licences when operators fail to comply with legal requirements, making the proposed renewal process unnecessary.

The association further highlighted that, with the exception of Kangwon Land, South Korean casinos are limited to foreign visitors, making additional regulatory costs more difficult for operators to absorb.

Regional Competition Raises Additional Concerns

The association said stricter regulation could reduce South Korea’s ability to compete with other gaming destinations in Asia, particularly as Japan prepares for the opening of the MGM Osaka integrated resort later this decade.

It warned that high-value international players could choose alternative destinations if operating conditions become less favourable for casino businesses in South Korea.

Industry Disputes Claims Over Tax Burden

In a separate position paper released on Wednesday, the association rejected claims that contributions to the Tourism Promotion and Development Fund have remained unchanged for three decades.

It explained that the contribution already operates on a progressive scale ranging from 1% to 10% of gross gaming revenue, depending on turnover. Since 1994, casino operators have contributed approximately KRW5.23 trillion (US$3.53 billion) to the fund.

The association also noted that casinos have been subject to individual consumption tax since 2008, with effective rates reaching 5.2% once education taxes are included.

According to its estimates, raising the maximum contribution rate to 15% would increase annual payments by around KRW76.3 billion for three mainland casino operators or approximately KRW101.9 billion when a Jeju-based operator is included.

Industry Urges Government to Reconsider

The Korea Casino Association called on the government to withdraw both proposals, arguing that neighbouring jurisdictions are adopting policies aimed at supporting gaming industry growth rather than increasing regulatory costs.

The organisation said a more supportive regulatory approach would help casino operators continue contributing to tourism development and the broader economy while remaining competitive within the Asian gaming market.