South Korea Foreigner-Only Casinos Warn of Potential Closures Under Proposed Levy Changes

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% to 15% of revenue along with shifts to five-year license renewals, and these measures could accelerate bankruptcies for businesses still recovering from COVID-19 impacts. The association pointed out that casinos face unique taxation on revenue even during loss-making periods, and roughly half of operators have recorded annual deficits over the past decade. At the same time the group highlighted record contributions reaching KRW219.5 billion in 2025, a figure that rose 61.7% from 2019 levels according to industry reports.

Details of the Proposed Regulatory Adjustments

Under the suggested framework the tourism levy applied to revenue would climb to a maximum of 15%, and this adjustment arrives while operators navigate ongoing recovery from pandemic-related shutdowns and reduced visitor numbers. License renewals would move to a five-year cycle, and the association noted that such changes compound financial pressures because levies continue regardless of profitability. Data from the past ten years shows that approximately half the operators posted deficits in multiple years, and this pattern persists even as some facilities generate substantial tax payments to government coffers.

The Korea Casino Association emphasized that the levy structure differs from standard corporate taxation since it targets gross revenue rather than net profits, and this approach leaves operators exposed during periods of low tourism or operational losses. Figures for 2025 demonstrate that total contributions hit KRW219.5 billion, marking a 61.7% increase over 2019, yet the association argued that sustained higher levies could erode these gains and push marginal operators toward insolvency. Those who have tracked the sector note that foreigner-only casinos rely heavily on international visitors, and post-COVID travel patterns have not fully returned to pre-pandemic volumes in several regions.

Financial Performance and Historical Context

Operators have contributed KRW219.5 billion in 2025 while still facing the reality that many facilities operated at a loss in prior years, and the association cited this history to illustrate why an increased levy could prove destabilizing. The proposed changes would apply uniformly, and the group stated that facilities already reporting deficits over the decade could face accelerated closure risks if revenue-based payments rise further. License terms shifting to five-year renewals add another layer of uncertainty because operators must plan capital investments and marketing efforts around shorter approval windows.

Evidence gathered by the association shows that roughly half of the represented operators posted annual deficits at some point in the last ten years, and this statistic underscores the volatility tied to tourism fluctuations. The 2025 contribution total of KRW219.5 billion reflects stronger visitor inflows in certain months, yet the group warned that proposed levy hikes could reverse momentum by reducing available funds for facility upgrades and staff retention. Those monitoring regulatory developments observe that the tourism levy functions as a dedicated revenue stream for government programs, and any increase would directly affect operator cash flow even when expenses exceed income.

Industry Response and Recovery Challenges

The Korea Casino Association outlined its position through statements that connect the proposed 15% levy cap with broader regulatory adjustments, and members stressed that continued revenue-based taxation during loss periods creates an uneven burden compared to other tourism sectors. Recovery from COVID-19 remains incomplete for many properties because international arrivals have grown unevenly across source markets, and the association tied this slow rebound to the need for stable tax policies rather than sudden increases. The five-year license renewal cycle would require operators to demonstrate compliance and financial viability at more frequent intervals, and the group indicated that combined with higher levies this could limit access to financing for necessary renovations.

Contributions reached KRW219.5 billion in 2025 after rising 61.7% from 2019, and these payments occurred despite the fact that half the operators experienced deficit years within the preceding decade. The association presented these figures to illustrate resilience while also highlighting vulnerability, and it called attention to the unique position of foreigner-only casinos that must remit levies on revenue irrespective of bottom-line results. Regulatory bodies reviewing the proposals would receive input from the association detailing how such changes interact with ongoing recovery efforts across the sector.

Conclusion

The Korea Casino Association’s warning centers on the combined effects of raising the tourism levy maximum to 15% and introducing five-year license renewals, and these elements together could hasten bankruptcies among operators still emerging from COVID-19 disruptions. Record 2025 contributions of KRW219.5 billion stand alongside the documented history of deficits affecting roughly half the operators over ten years, and the association continues to engage with policymakers on the revenue-based levy structure. Observers following the July 2026 developments note that the outcome will shape the financial landscape for South Korea’s foreigner-only casino segment in the years ahead.