South Korea Opens Tourism Fund to Casino Operators for Construction and Facility Loans

South Korea’s government has expanded access to the Tourism Promotion and Development Fund, allowing casino operators to borrow for construction, expansion, renovation and related facility investments for the first time. The revised guidelines from the Ministry of Culture, Sports and Tourism create a separate loan category after prior eligibility covered only operating expenses. The change coincides with a national proposal to raise the maximum casino contribution from annual gross gaming revenue to 15 percent, as reviewed by GGRAsia.

Loans drawn for infrastructure by larger operators will carry 3.80 percent annual interest. This follows the Bank of Korea’s late-August increase in its benchmark rate by a quarter percentage point to 3.00 percent. Kangwon Land Inc, which runs the sole casino permitted to serve locals, and operators of foreigner-only venues are eligible to apply.

Loan Caps and Allocation Rules

An industry source told GGRAsia that loans are capped at KRW15 billion (US$11.0 million) for new construction or expansion and KRW8 billion for renovation work. Large and medium-sized companies face limits of 75 percent of those amounts. A higher ceiling of KRW20 billion applies to smaller companies for casino facilities in designated tourism zones or complexes. The ministry set a KRW150 billion cap on total fourth-quarter lending, with 70 percent allocated to areas outside Seoul. Applicants must already hold required casino-business and building approvals, and operators must retain their gaming licences after completion or repay the loans.

Timing and Precedent

The Seoul Economic Daily reported the step as the first since the fund’s introduction in 1998. It arrives as industry sources indicate that broader casino regulatory reforms, including possible time-limited licences for foreigner-only venues, could slip amid ongoing consultations.

Reporting: GGRAsia

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