South Korean casino operators push back against planned levy increase as Osaka IR looms

Facing a looming competitive threat from Japan's upcoming integrated resort in Osaka, South Korea's foreigner-only casino industry is pushing back against government plans to raise the mandatory contribution to the Tourism Promotion and Development Fund. The proposed amendment, under review by the Ministry of Culture, Sports and Tourism, would lift the ceiling on the levy from 10% to 15% of gross revenue.

The ministry argues the current contribution rate, which has barely been adjusted in over three decades, fails to reflect the sector's growth. The revised structure would introduce a higher bracket for top-earning operators, with the additional funds earmarked for tourism infrastructure and workforce training.

Operators, however, contend the levy is calculated based on total revenue rather than operating profit, meaning the charge applies even when a property is unprofitable. They point to heavy costs for complimentary travel, accommodation, gaming credits, staffing, and facility upkeep as already squeezing margins.

According to analyst estimates cited by local media, a five-percentage-point increase could dent operating profit forecasts by roughly 29% for Paradise Co., 37% for Grand Korea Leisure (GKL), and 21% for Lotte Tour Development. Based on last year's figures, Paradise's annual contribution alone would climb by about KRW46 billion ($31 million).

The debate unfolds as South Korea's casino sector continues its post-pandemic recovery while bracing for heightened regional competition. Japan's Osaka integrated resort, scheduled to open in 2030, is expected to rank among Asia's largest gaming and tourism destinations.

Industry representatives have previously called for broader regulatory reforms to sharpen competitiveness before the Osaka development debuts, arguing that sustained investment in both gaming and non-gaming amenities is critical to drawing international visitors in an increasingly crowded market.

Separately, South Korean regulators are also considering action against the prediction-market platform Polymarket over suspected illegal gambling, while the country has launched a new AI-driven initiative aimed at preventing gambling harm among young people.