Korea Casino Association Warns of Bankruptcies If Tourism Levy Rises to 15 Percent of Revenue

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 maximum tourism levy from 10 percent to 15 percent of revenue along with additional regulatory adjustments such as five-year license renewals, and the group stated these measures would accelerate bankruptcies among operators still recovering from COVID-19 impacts.

Details of the Proposed Changes

Under the suggested framework the tourism levy would apply directly to gross revenue rather than profits, and operators would face mandatory license renewals every five years instead of the current longer cycles, while the association emphasized that these shifts come at a time when many facilities continue to rebuild visitor numbers and stabilize operations following pandemic-related closures and travel restrictions.

Unique Levy Structure and Financial Realities

Casinos in this sector operate under a distinctive system where levies apply to revenue even during periods of operating losses, and the association noted that this structure differs from many other industries where taxes typically tie to net income, which means facilities can owe payments regardless of whether they achieve profitability in a given year.

Roughly half of the operators have recorded annual deficits over the past decade, and this pattern highlights ongoing financial pressures that predate recent regulatory proposals yet continue to influence recovery trajectories as visitor flows gradually return to pre-pandemic levels.

Record Contributions in 2025

The association cited record contributions totaling KRW219.5 billion in 2025, which represents a 61.7 percent increase compared to 2019 figures, and these payments demonstrate the sector’s ongoing economic role even as operators navigate cumulative losses and regulatory uncertainty that could reshape future obligations.

Data from the past decade shows consistent challenges for multiple facilities, and the group pointed out that revenue-based levies create additional strain when combined with recovery costs such as marketing to international tourists and infrastructure maintenance required to attract foreign visitors who form the core customer base.

Potential Consequences for Operators

Five-year license renewal cycles would introduce recurring administrative and compliance expenses, and the association argued these requirements together with the higher levy rate could push marginal operators toward insolvency at a moment when post-COVID stabilization remains incomplete for many properties across the country.

Observers note that the combination of revenue-linked taxation and periodic renewals creates a framework where even facilities posting strong contribution numbers in one year may face immediate viability questions if losses persist or if visitor volumes fluctuate due to external economic factors.

Industry Context and Recovery Efforts

Operators have worked to restore international tourism connections since pandemic restrictions lifted, adn the association highlighted how the proposed changes arrive while these efforts continue without full financial equilibrium yet achieved across the foreigner-only segment.

According to statements from the group the levy increase would apply uniformly, which means facilities already operating at a deficit would see their obligations rise proportionally to any revenue gains, and this dynamic could limit reinvestment in facilities or staff retention during the ongoing recovery phase.

Conclusion

The Korea Casino Association’s July 2026 statement outlines specific risks tied to the tourism levy adjustment and license renewal modifications, while data on past deficits and 2025 contributions provide context for the financial position of operators, and these elements together form the basis for the group’s assessment of potential bankruptcies if the proposals advance without adjustment.