[Edaily Reporter Park Sun-Yeop ] Analysts have noted that uncertainty surrounding the earnings of related companies has increased following reports that the government is considering raising the cap on contributions to the Tourism Promotion and Development Fund by foreigner-only casinos. If the policy is implemented, operating profits for major casino operators could decline by more than 20–30% compared to previous estimates, leading to the assessment that a conservative approach is needed for the time being.
Ji In-hae, a research analyst at Shinhan Investment Securities, stated in a report on the 16th, “Reports that the cap on contributions to the Tourism Promotion and Development Fund will be raised from the current 10% to 15% could cause uncertainty regarding the earnings of foreigner-only casino operators and worsen investor sentiment,” adding, “Although precise guidelines have not yet been finalized, a downward revision of earnings expectations is inevitable.”

Previously, E-Daily reported that the government is considering raising the cap on contributions to the Tourism Promotion and Development Fund from 10% to 15% of total casino revenue for foreigner-only casinos, and changing the existing de facto permanent licensing system to a five-year license renewal system. On the 15th, when this news broke, LOTTE TOUR DEVELOPMENT CO., LTD(032350)plummeted 14.6%, PARADISE(034230)fell 13.5%, and Grand Korea Leisure (Grand Korea Leisure(114090)) dropped 10.8%.
However, the current review focuses on inland casinos under the jurisdiction of the Ministry of Culture, Sports and Tourism. Since Jeju casinos are managed separately by Jeju Province, a separate legislative amendment would be required to apply the same system to them. Accordingly, LOTTE TOUR DEVELOPMENT CO., LTD, which operates the Jeju Dream Tower Casino, is not directly subject to this reform plan; however, analysts explain that uncertainty across the entire industry is being reflected in stock prices.
Shinhan Investment & Securities estimated that if the contribution to the Tourism Promotion and Development Fund increases from 10% to 15% of casino revenue, this year’s operating profit estimates would decline by approximately 29% for PARADISE, 21% for LOTTE TOUR DEVELOPMENT CO., LTD., and 37% for Grand Korea Leisure compared to previous projections.
PARADISE’s operating profit estimate for this year is projected to drop by 28.6%, from 181.4 billion won to 129.5 billion won. Operating profit for 2027 is also forecast to decrease by 32.5%, from 222.8 billion won to 150.4 billion won. The operating profit margin is expected to fall by 4 percentage points, from 13.9% this year to 9.9%.
Grand Korea Leisure is also projected to see its operating profit fall by 37.1%, from 66.3 billion won to 41.7 billion won, as the Tourism Promotion and Development Fund is expected to increase from the previously estimated 47.6 billion won to 71.8 billion won this year. LOTTE TOUR DEVELOPMENT CO., LTD is estimated to see its operating profit decline by 21%, from 200.1 billion won to 158.1 billion won, as its tax and public charge burden expands from 119.3 billion won to 152.6 billion won.
Shinhan Investment & Securities lowered its target price for PARADISE by 30%, from 20,000 won to 14,000 won. For LOTTE TOUR DEVELOPMENT CO., LTD, the target price was lowered by 22% from 25,500 won to 20,000 won, and for Grand Korea Leisure, it was lowered by 14% from 14,000 won to 12,000 won. While maintaining its “overweight” recommendation for the leisure sector, the firm advised a wait-and-see approach toward foreign casino operators for the time being.
Research Fellow Ji pointed out that the limited market size of domestic casinos exclusively for foreign nationals—which do not admit Korean nationals—must also be taken into account. He explained that the combined burden of the Tourism Promotion and Development Fund, individual consumption tax, and education tax already amounts to approximately 16% of casino revenue, and could rise to about 20% if the reform plan is implemented.
He said, “Competition in the Asian casino market is expected to become even fiercer, with Japan’s open casinos set to begin operations after 2030,” adding, “If tax regulations are tightened, casino operators’ ability to invest in non-casino facilities—such as hotels and entertainment venues—will inevitably diminish.”
He continued, “If the reform plan is implemented, it will be necessary to consider not only the ‘stick’ of tax rate increases but also the ‘carrot’ of measures such as expanding the number of gaming venues, improving transportation and airport infrastructure, and relaxing regulations for foreign tourists.”