The tourism industry is expressing growing concerns over proposed regulatory changes to the casino sector. The government's plans to increase the upper limit of tourism development fund contributions and introduce a five-year license renewal system are seen as threats to the survival of the casino industry and could halt significant private investments.
On August 4, a policy discussion on improving laws and regulations for the casino industry was held at the Korea Press Center in Jung-gu, Seoul, hosted by the Korea Tourism Association. Attendees from the casino sector unanimously urged that investment stability and industry development policies should take precedence over regulatory tightening.
During the meeting, urgent voices were raised, stating, "If the fund contributions increase, investments will inevitably stop." The integrated resort sector, which has already made large-scale investments in the trillions of won, warned that raising the fund contribution limit from the current 10% to 15% would make it virtually impossible to turn a profit and would obstruct future investments.
Kim Ho-yeon, a strategy director at Inspire, emphasized, "Inspire is not just a casino operator; we are investing in the K-culture ecosystem by establishing the largest arena in the country with an investment of 400 billion won. Our structure reinvests casino profits into cultural facilities and tourism infrastructure, but an increase in fund contributions will significantly worsen our capacity for private investment."
Concerns about financial crises stemming from the 15% contribution rate increase were also significant. Lee Jang-seong, a finance director at Lotte Tour Development, noted, "Despite generating over 470 billion won in casino revenue last year, we paid 51.5 billion won in contributions, resulting in a pre-tax loss of 4.5 billion won. If we are required to pay hundreds of millions more, the impact will be tremendous."
He added, "Since the controversy over this policy reform, our lenders have been inquiring negatively about refinancing options. Some investors have sent early repayment demands."
Criticism was also directed at the revival of the five-year casino license renewal system, which has not been in place for over 30 years. Concerns were raised that this could disrupt business continuity and significantly undermine job security for employees.
Bang Sang-hoon, a human resources director at Lotte Tour Development, stated, "This will lead to various side effects, including job insecurity for employees and uncertainty for operators regarding the continuity of their businesses." The labor union at Paradise SegaSammy Casino also expressed that the increased costs from fund hikes would ultimately be passed down to workers in the form of reduced wages and job security.
Despite the industry's strong pushback and expressions of crisis, the Ministry of Culture, Sports and Tourism responded to claims of excessive regulation, stating that many aspects of the industry's assertions are inaccurate.
On August 3, the ministry explained the background for the proposed tourism fund contribution system and license renewal system, clarifying that the plan is not to apply a flat 15% rate but to consider a progressive system that would only apply the 15% rate to excess revenue above a newly established high-revenue threshold, suggesting that the actual additional burden would be much lower than industry estimates.
In response to criticisms that basing fund contributions on revenue rather than operating profit is unfair, the ministry pointed out that major casino-operating countries like the U.S., Singapore, and Macau also base their contributions on revenue. It noted that a 1999 Constitutional Court ruling found that imposing fees based on total revenue does not violate equal rights.
Furthermore, regarding the five-year license renewal system, the ministry clarified that it is not a 're-licensing' process that would start from scratch for existing operators but rather a system that regularly assesses whether they continue to meet licensing conditions. The ministry stated, "Major countries worldwide also conduct periodic reviews of the casino industry. It is rare to find a system that grants licenses without an expiration date for a patented business like casinos."
* This article has been translated by AI.
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