[Edaily Kang Gyeong-rok Travel Reporter] The government has come into direct conflict with the tourism industry as it pushes forward with plans to raise the contribution rate for the Casino Tourism Promotion and Development Fund and introduce a five-year renewable licensing system. After 12 tourism industry organizations—including those representing casinos, hotels, travel agencies, and MICE (Meetings, Incentives, Conferences, and Exhibitions)—demanded the withdrawal of the reform on the 3rd, the Ministry of Culture, Sports and Tourism issued a statement that same day, countering that the changes were intended to “normalize the casino licensing business.” With revenue from foreigner-only casinos rising 21.6% last year, a tense standoff has emerged between the government—which argues that public contributions and regulatory frameworks must be strengthened to match the expanded market size—and the industry, which contends that such measures will stifle long-term investment.

◇Where Does the 15% Apply? Disagreement Over Ability to Bear the Burden
The two sides’ calculations regarding the fund restructuring differ from the outset. The plan being pushed by the government is to raise the upper limit on the casino tourism fund contribution rate under the Tourism Promotion Act from the current 10% to 15%. The Ministry of Culture, Sports and Tourism clarified that this does not mean a 15% rate will be applied to all casino revenue currently subject to the 10% rate. Instead, it will be a progressive system that creates new high-revenue brackets and applies a higher contribution rate to revenue exceeding those thresholds. Specific criteria have not yet been determined.
Under the current system, the fund levies 1% on casino revenue of 1 billion won or less, 5% on revenue between 1 billion and 10 billion won, and 10% on revenue exceeding 10 billion won. The Ministry of Culture, Sports and Tourism plans to first raise the cap to 15% in the law and then establish new high-revenue brackets by soliciting input from the industry and experts during the revision of the enforcement decree. It was also noted that the proposal mentioned by some quarters—a 15% rate for revenue of 300 billion won or more—is not a finalized plan. The fund is levied on individual casino venues, not on the corporation as a whole.
The industry argues that caution is needed regarding the increase in the cap itself. They contend that since the casino fund is levied based on casino revenue rather than operating profit, it is difficult to adequately reflect the profitability and investment costs of individual venues. Twelve tourism industry organizations argued that increasing the fund burden while some operators continue to operate at a loss could negatively impact investment and employment.

The government counters that the revenue-based levy is a system that reflects the unique characteristics of the casino industry. It points out that major casino markets—including the United States, Singapore, Macau, and Japan—also levy taxes or fees based on casino revenue rather than operating profit. The government explains that while operating profit can vary significantly depending on investment and accounting practices, casino revenue is a relatively objective indicator for assessing tax-paying capacity. The Constitutional Court also ruled in 1999 that the imposition of levies based on revenue was constitutional, following a constitutional complaint filed by a casino operator.
The market as a whole is showing clear signs of recovery. According to the Integrated Supervisory Commission for the Gambling Industry, revenue from foreigner-only casinos last year reached 2.2638 trillion won, a 21.6% increase from the previous year. The number of visitors also rose by 18.7% to 3,494,000. The fund contributions paid by foreigner-only casinos last year totaled 219.5 billion won, representing 9.7% of net revenue.
The industry argues that the ability to pay should not be judged based on revenue growth alone. It points out that foreigner-only casinos are increasingly shifting from standalone venues to integrated resorts that include hotels, MICE facilities, performance venues, and shopping centers, meaning a significant portion of the revenue generated by the casinos is reinvested into non-casino facilities.

◇Regular Inspections vs. 5-Year Renewals: Long-Term Investment Is Difficult
Opinions are also divided regarding the license renewal system. The government views the current system as effectively a “perpetual license.” Prior to 1995, the casino industry operated under a three-year re-licensing system, but the license validity period was eliminated during the 1994 amendment of the Tourism Promotion Act. The government believes it is necessary to change the current structure, which grants a restricted, licensed business to a specific operator without a set expiration date.
The Ministry of Culture, Sports and Tourism emphasized that the license renewal system differs from “re-licensing,” which eliminates existing operators every five years and selects new ones. Instead, it is a system that verifies at regular intervals whether existing licensing requirements—such as management capability and financial soundness—are being maintained, and grants the operating rights for another term if the criteria are met. The ministry also plans to establish a grace period before the system takes effect.
The industry counters that simply stipulating the license validity period in law could alter the investment environment. It takes several years for an integrated resort to open—from business planning and licensing to financing and construction—and an even longer period to recoup the investment. They argue that if licenses must be renewed every five years, financial institutions and foreign investors will inevitably assess the business risk as high.
Another reason the industry opposes tighter regulations is that, following Macau, Singapore, and the Philippines, Japan has now also begun investing in large-scale integrated resorts. The industry believes that if South Korea alone were to simultaneously increase the burden of the fund and tighten regulations on operating rights, it could put the country at a disadvantage in the competition to attract integrated resorts in East Asia.
Experts point out that a distinction must be made between the introduction of the system and its detailed design. At a National Assembly forum last month, Professor Choi Young-bae of Gachon University noted the need to periodically verify financial soundness, compliance, and contributions to tourism, but added, “We need a principle whereby licenses are renewed if clear evaluation criteria are established and met.” Professor Kim Jae-ho of Inha Technical College stated, “Along with expanding the fund burden, measures to improve the investment environment and foster the industry must also be considered.”
Lee Myung-jin, head of the Casino Industry Policy Team at the Ministry of Culture, Sports and Tourism, expressed the view at the forum that “since the casino industry is one permitted by the government through licensing, it is necessary to reexamine the system established 30 years ago.” He added that the ministry would formulate the system while taking the industry’s circumstances into account.
The government is also pushing forward with a plan to introduce a prior approval system for casino transfers and acquisitions, corporate splits and mergers, and changes in major shareholders. During the amendment process, key issues are expected to include high-revenue brackets and application rates, renewal periods and evaluation criteria, as well as transitional measures for existing operators.