The Ministry of Culture, Sports and Tourism has taken a firm stance against the collective backlash from the casino and tourism industries. Responding to claims that the increase in tourism fund burdens and the introduction of a five-year renewal permit system are excessive regulations, the ministry stated that many of these assertions are inaccurate and provided detailed explanations regarding the revenue-based tourism fund assessment and the purpose of the renewal permit system.
On August 3, the ministry outlined the background for the tourism fund payment system and the push for the renewal permit system. Previously, 12 organizations from the tourism industry, including the casino sector, issued a joint statement urging the withdrawal of these measures, arguing that they would lead to reduced investment and diminished industry competitiveness.
In this context, the ministry emphasized that assessing the tourism fund based on revenue is a common practice worldwide. Major casino-operating countries such as the United States, Singapore, Macau, and Japan also impose fees based on revenue rather than operating profit, as revenue more objectively reflects a company's ability to bear the burden. Additionally, the Constitutional Court ruled in 1999 that imposing fees based on total revenue does not violate the right to equality, deeming it constitutional.
The ministry explained that the tourism fund is a public resource benefiting the entire tourism industry, encompassing 47 sectors, rather than specific casino operators. Funds contributed by casinos are utilized for marketing to attract foreign tourists, revitalizing local tourism, providing loans for tourism businesses, fostering tourism ventures, and training tourism personnel, thereby creating a virtuous cycle that promotes the growth of both the tourism and casino industries.
It was also noted that the casino industry has grown with the support of the tourism fund. Casinos can receive loans for operational funds and receive extensive support for facility improvements, the introduction of new machines, overseas office operations, and advertising and promotional expenses. From 1998 to last year, there were 71 instances of operational fund loans provided to the casino industry, totaling approximately 91.5 billion won.
The ministry refuted claims regarding the burden level, stating that the operating profit of major casino operators is calculated after deducting various operating costs, including tourism fund payments. The assertion that '50-80% of operating profit is paid as a tourism fund' was described as a misunderstanding of accounting concepts.
Regarding the burden size due to the increase in tourism fund rates, the ministry indicated discrepancies with industry estimates. It is considering a plan to establish a high-revenue bracket where only the excess amount would be subject to a 15% rate, rather than applying a uniform 15% to the current 10%. Furthermore, since the tourism fund is assessed per casino establishment rather than by corporation, the actual burden may be lower. Specific progressive brackets will be finalized in consultation with industry and expert opinions during the upcoming amendment process.
The ministry clarified that the renewal permit system is distinct from a 're-licensing' process that would involve selecting existing operators again. Instead, it serves as a mid-term evaluation to assess compliance with permit conditions and financial soundness at regular intervals, allowing businesses to continue operating if they meet the requirements. The ministry noted that periodic reviews of the casino industry are also conducted in major countries, and it is rare for casino operations to be licensed indefinitely without a validity period. A grace period will be established during the implementation process to protect the trust of existing operators.
Additionally, the ministry provided further clarification regarding the regulatory level for foreign-only casinos. It stated that these casinos have been operating stably in a limited competitive environment and, unlike Kangwon Land, which allows domestic visitors, they are not subject to additional regulations such as closure funds, addiction prevention fees, entry taxes, or betting limits.
* This article has been translated by AI.
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