Government holds meeting with casino industry on levy increase

South Korea's government is pushing to raise the cap on the tourism promotion and development fund levy paid by foreigner-only casino operators from 10 percent of total sales to 15 percent, the Ministry of Culture, Sports and Tourism said¹. The ministry held a meeting on July 14 with casino industry representatives, Jeju Island officials and the Korea Culture and Tourism Institute to gather opinions on the higher levy and on a license renewal system¹.

The current Tourism Promotion Act requires casino operators to pay a set share of total sales, within a 10 percent ceiling, into the fund¹. The enforcement decree applies a progressive structure: 1 percent for annual sales of 1 billion won or less, 5 percent for sales above 1 billion won up to 10 billion won, and 10 percent above 10 billion won¹. The levy is charged per casino site, not per operator; Grand Korea Leisure, which runs casinos in two locations in Seoul and one in Busan, is assessed separately at each of the three sites¹. The government is considering raising the legal cap to 15 percent and then amending the decree to add a top bracket above the existing 10 percent tier¹. The sales threshold for the top rate and whether existing brackets will be adjusted have not been decided¹.

A ministry official said the industry's growth over three decades had left the progressive structure underused¹:

Analysts at Hana Securities estimated that a 5 percentage point rise would cut operating profit at Paradise and GKL by 22 percent and 28 percent respectively, while Lotte Tour Development, which falls under a Jeju special law, could see a 19 percent decline if Jeju pursues a similar change¹. Analysts at Eugene Investment and Securities estimated additional burdens of about 47 billion won for Paradise, 30 billion won for Lotte Tour Development and 23 billion won for GKL, with operating profit falling 20 to 30 percent below previous forecasts¹. Shinhan Investment and KB Securities said the higher levy could weaken investment capacity in non-casino areas such as hotels and entertainment and add pressure in competing with the Osaka integrated resort due to open in 2030¹. A casino industry official called a 15 percent rate "사실상 징벌적 과세," or effectively punitive taxation, citing existing individual consumption tax, education tax and corporate tax¹.

The government is also pursuing a five-year casino license renewal system and a pre-approval requirement for transfers of casino business rights, which the ministry described as an international-standard framework to block illegal funds in such transactions¹.

What it means for players

The levy is paid by casino operators, not by players, so it does not change entry fees or table limits directly. Any effect on players would come through operator responses: the analysts cited expect lower operating profit at Paradise, GKL and Lotte Tour Development if the cap rises¹, and the industry official warned that higher burdens could shrink facility investment and marketing¹. The levy applies to foreigner-only casinos, so it does not cover the single casino open to South Korean nationals at Kangwon Land, which is not named in the reporting. The license renewal system, if adopted, would apply to operators every five years; the ministry said it is a periodic check that initial licensing conditions are still met, not a new set of conditions¹. Details of how renewal would work in practice have not been reported.

What happens next

A policy debate titled "카지노산업 선진화를 위한 제도개선 토론회" will be held on July 23 at the National Assembly Members' Office Building, organized by the office of Democratic Party lawmaker Cho Kye-won and the Korea Tourism Association¹. The fund levy, license renewal and pre-approval for transfers are due to be discussed¹. Cho is expected to propose related legislative amendments after the debate¹.