Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
ROUNDTABLE Regulatory storm threatens Korea's integrated resorts
Participants in The Korea Times' roundtable discussion pose for a photo at the newspaper's headquarters in Seoul, Wednesday. From right are Lee Jae-seok, a professor in the department of tourism management at Kangwon National University; Kim Ji-hoon, an adviser at law firm Shin and Kim; Jeong Kwang-min, a research fellow at the Korea Culture and Tourism Institute; Seo Won-suk, president of the Tourism Sciences Society of Korea; Lee Jong-myoung, executive director of the communications department at Paradise; Kang Dae-suk, assistant vice president of legal and government affairs at Inspire Entertainment Resort; Kim Jae-kyoung, vice president of The Korea Times; and Kim Eun-ju, researcher at the Tourism Sciences Society of Korea. Korea Times photo by Shim Hyun-chul
By Baek Byung-yeul
Experts caution casino tax hike jeopardizes investment, survival
Korea's casino and integrated resort industry is facing a major crisis as the government pushes to increase the maximum tourism development fund levy from 10 percent to 15 percent of total revenue.
The regulatory shift comes as major operators are still struggling to recover massive initial investments and manage escalating operational costs following years of market uncertainty.
Industry executives and tourism experts gathering at The Korea Times' roundtable discussion on Wednesday highlighted that the proposed policy changes could hinder future expansion and harm competitiveness.
The discussion focused on the Ministry of Culture, Sports and Tourism's revision of the Tourism Promotion Act, which the government reportedly began pushing forward in July.
Along with raising the cap on the tourism fund levy, the ministry is seeking to implement a five-year license renewal system and a prior approval process for business ownership transfers.
While the government argues that these measures are necessary to align with global standards and reclaim public benefits, local resort operators point out that the sudden surge in financial burdens will dampen the industry.
Seo Won-suk, second from right, president of the Tourism Sciences Society of Korea, speaks during The Korea Times' roundtable discussion at the newspaper's headquarters in Seoul, Wednesday. Korea Times photo by Shim Hyun-chul
Calls for regulatory relief
Kang Dae-suk, assistant vice president of legal and government affairs at Inspire Entertainment Resort, expressed concern over the timing and severity of the proposed regulations.
"We invested nearly 2 trillion won ($1.45 billion) to build a world-class resort on Yeongjong Island based on government assurances of steady support," Kang said. "Casino gaming occupies less than 4 percent of facility space."
Kang stressed that the resort is already enduring severe financial hardship.
"Our accumulated deficit reached nearly 600 billion won by last year," Kang said. "Despite these heavy losses, we have been borrowing money to pay tens of billions of won in tourism funds every year."
He expressed concern that increasing the fund levy could pose a serious risk to the resort's upcoming refinancing of more than 1 trillion won next year.
"If financial institutions view this industry as unstable due to arbitrary regulatory hikes, our refinancing costs will soar," Kang added. "That will force us to cut operating costs, which directly threatens local employment and cultural investments like our arena."
Lee Jong-myoung, executive director of the communications department at Paradise, voiced similar concerns regarding continuous reinvestment requirements.
"Integrated resorts cannot maintain competitiveness without constantly reinvesting in non-gaming facilities such as conventions, luxury hotels and entertainment," Lee said.
He said Paradise City, an integrated resort of Paradise Group, also endured years of massive losses after opening in 2017 before turning a small profit recently. Both Paradise City and Inspire are integrated resorts that opened on Yeongjong Island in 2017 and 2023, respectively.
"Foreign-only casinos in Korea operate under volatile external variables like diplomatic tensions and pandemic threats," Lee said. "Imposing a rigid revenue-based levy increase creates a crushing burden that discourages future investment."
The Korea Times' roundtable discussion on integrated resorts is underway at the newspaper's headquarters in Seoul, Wednesday. Korea Times photo by Shim Hyun-chul
Need for long-term vision
Legal and academic experts at the roundtable voiced concern over the government's blanket approach to revenue-based levies, emphasizing that a rigid tax policy could deter prospective foreign investors and destabilize the local tourism ecosystem.
Seo Won-suk, president of the Tourism Sciences Society of Korea and a professor at Kyung Hee University, who chaired the session, highlighted the public role of integrated resorts.
"The non-gaming facilities built by integrated resorts serve as vital national tourism infrastructure," Seo said. "Regulations should aim to foster industry growth and attract foreign visitors rather than penalize operators."
Kim Ji-hoon, an adviser at law firm Shin and Kim, said that applying a uniform levy increase without considering profitability creates serious distortions.
"In other specialized sectors, special fund systems usually include relief mechanisms, temporary waivers or exemptions for struggling businesses," Kim said.
"Simply raising the levy based on top-line revenue without considering actual corporate losses sends a negative signal to global investors."
Lee Jae-seok, a professor in the department of tourism management at Kangwon National University, cautioned against sudden fee hikes by citing international precedents.
"In Nevada, it took half a century of gradual adjustments to raise the top casino tax rate from 5 percent to 6.75 percent," Lee said. "Sudden regulatory changes in other countries have historically forced companies to cut jobs and stop spending, ultimately weakening their ability to compete globally."
Jeong Kwang-min, a research fellow at the Korea Culture and Tourism Institute, emphasized the need for a more tailored policy framework.
"Korea's foreign-only casinos have vastly different operational structures, ranging from small leased urban venues to massive integrated resorts," Jeong said. "The government should establish long-term incentive policies that encourage operators to transform into full-scale integrated resorts."
Kim Jae-kyoung, vice president of The Korea Times, ended the discussion by calling for clear strategic vision and decisive policy leadership.
"Global destinations like Singapore and Japan have successfully leveraged integrated resorts through predictable regulatory environments," Kim said. "Korea needs a comprehensive long-term road map that allows integrated resorts to thrive as key drivers of the national economy."