South Korea Tourism Groups Demand Withdrawal of Casino Reform Proposals as Ministry Mounts Defense

Major representatives of South Korea’s tourism industry have called on the national government to withdraw proposed changes to the regulatory framework governing foreigner-only casinos. In a joint statement issued Monday, ten tourism organizations warned that the measures would deter long-term investment, threaten jobs and weaken the country’s position against regional competitors including Macau, Singapore, the Philippines and Japan.

The proposals, first outlined in early July by the Ministry of Culture, Sports and Tourism, would amend the Tourism Promotion Act to introduce a five-year licence renewal system, require prior approval for changes in controlling shareholders, and raise the maximum contribution to the Tourism Promotion and Development Fund from 10 percent to 15 percent of annual gross gaming revenue (GGR). As reported by GGRAsia, the groups—including the Korea Casino Association (KCA), Korea Tourism Association, Korea Hotel Association and Korea Association of Travel Agents—described the package as “a package of punitive regulations.”

The organizations noted that casino operators have continued payments to the fund despite many posting operating losses, because the levy is calculated on revenue rather than profit. They argued that raising the ceiling would “accelerate bankruptcies” and that five-year licence renewals would undermine legal certainty for capital-intensive projects.

Ministry Defends Reforms as Consistent with International Practice

The ministry responded the same day, stating that the higher tourism fund contributions follow international norms. It observed that most countries, including the United States, Singapore, Macau and Japan, levy casino taxes on gaming revenue rather than operating profit. The ministry rejected industry calculations suggesting operators pay 50 to 80 percent of operating profit into the fund, noting that contributions are deducted before operating profit is calculated.

It also disputed the KCA claim that three major mainland foreigner-only casino operators would face additional annual payments of up to KRW76.3 billion (US$51.4 million). Instead, the ministry said only revenue above a yet-to-be-determined higher band would face the increased rate, with final thresholds set after consultations with industry, academics and stakeholders. The ministry added that operators had received KRW91.5 billion in operating loans from the fund between 1998 and 2025.

On the licence renewal proposal, the ministry clarified that reviews would constitute periodic assessments of compliance, financial soundness and management capability rather than full relicensing. Existing operators would receive a transition period. It further rejected arguments for special treatment of foreigner-only casinos, noting they already operate under a limited-licence regime and avoid certain levies applied to Kangwon Land Inc, the sole property permitted to serve local residents.

What This Means for Regulatory Stability and Investment

In my three decades advising operators, investors and regulators on gaming frameworks, exchanges like this often mark an inflection point where revenue goals must be balanced against capital formation. The ministry’s commitment to consultation offers a channel for refinement, yet the introduction of periodic reviews and higher marginal levies could shift the risk profile for integrated resort development in South Korea. Client-partners monitoring this file should weigh the potential erosion of legal certainty against the stated modernization objectives, and consider active participation in the forthcoming stakeholder process to help shape workable thresholds.

Reporting: GGRAsia