South Korea’s Casino Reform Has Stalled, and the Industry Is Counting on It

Key Points

• South Korea’s Ministry of Culture, Sports and Tourism has delayed its September target for submitting the Tourism Promotion Act amendment, now aiming to submit later in 2026.
• The proposed 15% fund levy, calculated on gross gaming revenue rather than profit, threatens operators already posting operating losses, with analysts warning of a potential 37% profit hit.
• Lotte Tourism Development’s institutional investors triggered a KRW35 billion early bond redemption as investor confidence in the sector wobbled following the reform announcements.

South Korea’s Ministry of Culture, Sports and Tourism set a September target for submitting proposed casino regulatory amendments. That target has slipped. The ministry is now aiming to submit the legislation later in 2026, and even that timeline sits under pressure from two immovable obstacles: the Chuseok holiday from 24 to 27 September and the National Assembly’s annual parliamentary audit running from 6 to 27 October. What began as a government-led modernisation effort has widened into a dispute drawing in operators, unions, investors and twelve tourism organisations simultaneously.

The September Target Is Gone

A ministry official told the local newspaper, Money Today Network (MTN), that the proposed amendment has been postponed. “It was supposed to be submitted earlier, but now there is more time for the industry to consult and for internal consideration. Our plan is to submit it sometime this year,” the official said. Cho Gye-won’s office, the representative who has been working to pass the bill, separately confirmed to the MTN that the draft has not been sent by the ministry because it was under consideration.

The proposed amendments to the Tourism Promotion Act would raise the maximum casino contribution to the Tourism Promotion and Development Fund from 10% to 15% of annual gross gaming revenue, alongside a proposed five-year licence renewal system replacing the current ongoing licensing arrangement.

The Levy Calculation Is Where the Real Fight Sits

The headline rate of 15% is only part of the story. The more consequential detail is how that rate gets calculated. Under both the current system and the proposal, operators contribute based on gross gaming revenue, not operating profit. That distinction is the Korea Casino Association’s sharpest objection, and it is backed by uncomfortable numbers.

A joint statement from 12 tourism organisations in August, including the Korea Casino Association, Korea Tourism Association and Korea Hotel Association, noted that roughly half of South Korea’s 18 casino operators had posted operating losses over the past decade, yet continued paying into the fund regardless. Inspire Casino illustrated the problem most starkly: it paid nearly $20 million into the fund last year while reporting an operating loss of approximately $30 million for FY2025. The fund does not pause because a casino is loss-making.

The Korea Casino Association has estimated that raising the ceiling to 15% could increase annual payments for three major mainland operators by around KRW76.3 billion ($51.8 million). Including Jeju operators, that figure rises to approximately KRW101.9 billion ($69.2 million). Analysts have separately warned the reform could cut foreigner-only casino profits by as much as 37%.

The ministry has disputed the KCA’s projections, pointing out that the 15% rate would apply only to revenue above a threshold yet to be determined, not across the board. Specific thresholds will be finalised through a presidential decree after further consultation. That clarification has done little to steady investor sentiment.

The Market Has Already Delivered Its Own Verdict

By early August, Paradise’s share price had fallen more than 21% over four weeks following the reform announcements. Lotte Tourism Development faced a more immediate pressure point: institutional investors holding the company’s Series 8-1 convertible bonds exercised their put option after the stock price fell below the conversion price amid the policy uncertainty. According to reporting by Edaily, Lotte Tourism repaid KRW35 billion in convertible bonds early, representing half of a KRW70 billion issuance, and subsequently cancelled 2.74 million shares. Kwon Soon-gi, a director at Lotte Tour Development, said at an August roundtable that concerns at financial institutions were growing ahead of loan maturities. “Some are even talking about a bankruptcy crisis,” he said.

Unions and Workers Enter the Argument

The South Korean National Casino Labour Union Council submitted a formal opinion letter to Cho Gye-won’s office opposing the amendments. The council represents unions across Paradise, Paradise Busan, Jeju, Sega Sammy Incheon and Grand Korea Leisure. Workers joining the opposition shifts the dynamics noticeably. This is no longer only operators defending margins.

Hwang Joo-ho, Secretary-General of Paradise City’sLabourr Union, warned that companies facing higher fund payments would respond by cutting costs. That could mean fewer new hires and pressure on wages and employee benefits. At Jeju Dream Tower, the workforce grew from 103 employees in 2020 to over 1,000, yet casino utilisation still sits below 50%. Adding regulatory and financial uncertainty on top of that partial recovery is a prospect neither operators nor their employees are willing to accept quietly.

The Government’s Case, and Its Weakest Point

The ministry has justified these reforms as being necessary to update a system which hasn’t been updated for roughly 30 years. Since the inclusion of foreigner-only casinos in the Tourism Promotion Act in 1995, casino revenues have risen sharply, goes the claim, and therefore the contribution of the public should be proportional to the magnitude of these revenues. The fund collected KRW219.5 billion from casino operators in 2025, a record high compared to KRW135.7 billion in 2019.

Professor Lee Jae-seok, a tourism researcher and expert at the government advisory body K-Tourism Innovation Task Force, provided a more direct interpretation of the ministry’s arguments. He stated that it is “more rhetorical than substantive” to refer to such licence renewals as international standards. Also, he added that the majority of other systems of licence renewals are related to casinos operating for the locals, while in South Korea, the foreigner-only casino system carries more risk for investments by its very nature, and, therefore, any cycle of renewal of licenses in such a system will take longer than in other markets.

Former Ministry of Culture, Sports and Tourism director Kwon Kyung-sang went further, suggesting South Korea consider creating a dedicated Casino Act entirely separate from the Tourism Promotion Act, rather than layering additional requirements onto a framework designed for general tourism businesses.

Japan Is the Context Nobody Wants to Name Directly

Running underneath all of this is the competitive pressure of MGM Osaka. Industry groups have been direct about the threat. The Korea Casino Association has estimated that over 7 million South Koreans could visit the Osaka resort annually once it opens, spending an estimated 2.6 trillion won per year. That spending would leave South Korea entirely.

The joint statement from tourism organisations framed the concern plainly: “If excessive fund increases and short-term renewal regulations hold back the domestic industry, Korea’s tourism industry will not escape a vicious cycle of losing global market leadership and national wealth outflow.”

Expert Analysis

We find the government’s argument intellectually coherent but operationally thin. The ministry is correct that a 30-year-old framework needs updating, and the 61.7% growth in fund receipts since 2019 does demonstrate the industry’s expanded scale. What the government has not answered clearly is what operators get back. Professor Lee Jae-seok acknowledged that casinos contribute a disproportionately large share to the fund, yet according to his own assessment, relatively little appears to be reinvested in the sector, and no assurance exists that raising the contribution rate would direct additional funds toward casino tourism or integrated resort development.

That gap is where the government’s position becomes genuinely difficult to defend. Operators are being asked to pay more into a fund whose returns to the industry are unclear, under a licensing framework that would reduce their long-term certainty, at a moment when regional competition is intensifying and their own investors are already rattled. Whether the final legislation reflects any of the concessions industry groups are demanding will depend on how seriously the ministry treats the consultation it has now bought itself more time to conduct.