South Korea Likely to Limit Casino Tourism Fund Contribution Increase Below Proposed 15 Percent Ceiling

South Korea’s government may opt against raising the ceiling on casinos’ annual contributions to the Tourism Promotion and Development Fund all the way to 15 percent, choosing instead a lower figure. That assessment comes from KB Securities analyst Choi Yong-hyun in a recent memo, as reported by GGRAsia. Choi cited industry profitability pressures and an increasingly competitive regional landscape for casino operators.

The Korea Casino Association has been informed that the maximum contribution rate per casino could rise from the current 10 percent ceiling. On October 14, association secretary-general Shin Jong Ho said the proposal was yet to be formally tabled by the authorities.

Headwinds From Competition and Tax Changes

Choi wrote that given recent discussions about raising the tourism departure tax and intensifying competition that would follow MGM Osaka’s 2030 opening, “we believe the [South Korean] government is likely to adopt a more moderate approach than the proposed 5-percentage-point increase.” An academic study released on October 14 projected the South Korean casino sector could lose as much as KRW2.32 trillion (US$1.72 billion) in annual gaming spend once that Japan integrated resort launches.

Choi also flagged China’s new 20 percent tax on offshore trust income, which required unpaid taxes to be declared by October 22. He stated: “The regulatory changes have contributed to a decline in casino drop across Asia.” Drop refers to the amount of money paid by players for chips at gaming tables.

Recovery Prospects and Operator Positioning

KB Securities nonetheless expects visitor numbers at South Korea’s foreigner-only casinos to keep growing, aided by rising inbound tourism, even as average customer drop stays subdued. Choi stated: “Average customer drop has been affected by Chinese regulations, but could recover after the October offshore trust tax deadline and an expansion of rolling-chip tables targeting VIP customers.”

The memo highlighted Lotte Tour Development Co Ltd, operator of the Jeju Dream Tower foreigner-only casino, for potential gains in Chinese VIP visits. Choi added that “Foreigner-only casino operator Paradise Co Ltd could be better positioned if Chinese regulations tighten further, given its more diversified customer base.”

The Competitive Outlook
Any final contribution rate below the full proposed jump would reflect regulators balancing tourism fund goals against sustained casino viability as external pressures mount. Operators should track post-October 22 Chinese VIP flows and table-mix adjustments for signs of spend recovery, while preparing for the 2030 competitive shift from MGM Osaka.

Reporting: GGRAsia

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