S.Korea may limit casinos’ tourism fund hike as trading tightens, KB Securities says
Analyst Choi expects a smaller rise than the proposed 5-point increase after Oct. 14 memos.
Key Takeaways
- KB Securities analyst Choi Yong-hyun expects the government to adopt a more moderate increase than raising the fund ceiling from 10% to 15%.
- An academic study on October 14 projected up to KRW2.32 trillion (US$1.72-billion) could exit the market after MGM Osaka opens in 2030.
- China’s July offshore trust tax introduced a 20% charge and required unpaid taxes to be declared by October 22, which has reduced casino drop across Asia.
- KB Securities still forecasts rising visitor numbers at South Korea’s foreigner-only casinos, though average customer drop remains subdued.
The South Korean government could opt for a smaller increase than the proposed rise to 15% of annual casino revenue for the Tourism Promotion and Development Fund, according to KB Securities Co Ltd analyst Choi Yong-hyun in a memo dated after October 14, 2026. Choi cited weaker industry profitability and tighter regional competition that would follow the MGM Osaka integrated resort’s opening in 2030 as reasons for a more moderate approach.
What analysts and industry bodies have said
The Korea Casino Association has been informed that the ceiling on a single casino’s annual contribution to the Tourism Promotion and Development Fund could move from the current 10% to 15%. Shin Jong Ho, secretary-general of the Korea Casino Association, told GGRAsia on October 14 the proposal had not been formally tabled by authorities.
KB Securities' update argued policymakers will weigh broader headwinds before approving a full five-percentage-point increase. Choi wrote:
“Considering recent discussions about raising the [tourism] departure tax, and [the] intensifying competition” that would follow MGM Osaka’s 2030 opening in Japan, “we believe the [South Korean] government is likely to adopt a more moderate approach than the proposed 5-percentage-point increase.” — Choi Yong-hyun, KB Securities
Market pressures identified by KB Securities
KB Securities highlighted three specific pressures:
an academic study released on October 14 suggesting up to KRW2.32 trillion (US$1.72-billion) in annual gaming spend could flow out of South Korea once MGM Osaka opens;
China’s July tightening of taxation rules on offshore assets, which introduced a 20% tax on offshore trust income and required unpaid taxes to be declared by October 22;
a general rise in competitive supply in the region tied to new integrated resorts.
The brokerage noted that Chinese regulatory change had already contributed to lower casino drop in Asia. Choi added:
“Average customer drop has been affected by Chinese regulations, but could recover after the October offshore trust tax deadline and an expansion of rolling-chip tables targeting VIP customers.”
KB Securities nonetheless expects visitor numbers at South Korea’s foreigner-only casinos to keep rising, supported by increasing inbound tourism, while average customer drop remains subdued. The memo called out Lotte Tour Development Co Ltd, operator of Jeju Dream Tower, as a potential beneficiary of any rebound in Chinese VIP visits, and said Paradise Co Ltd could be better positioned if Chinese regulations tighten further because of its more diversified customer base.
Regulatory and sectoral implications
Policy decisions on the Tourism Promotion and Development Fund rate will balance revenue objectives against industry viability and the potential migration of spend to competitors, according to the analyst memo. The interplay between tax rulings in China and new supply in Japan are central variables cited by KB Securities in recommending caution to South Korean policymakers. For coverage of regulation developments see regulation.
Frequently Asked Questions
Will South Korea raise the casinos' tourism fund cut to 15%?
A full rise to 15% is not assured and KB Securities expects a smaller increase than the proposed five-percentage-point jump from the current 10%. The analyst Choi Yong-hyun cited profitability concerns and regional competition in a memo after October 14.
How much gaming spend might leave South Korea after MGM Osaka opens?
An academic study released on October 14 estimated as much as KRW2.32 trillion (US$1.72-billion) in annual gaming spend could outflow once MGM Osaka launches in 2030.
What Chinese tax change has affected casino revenues in Asia?
In July China introduced a 20% tax on offshore trust income and required unpaid taxes to be declared by October 22; KB Securities said these regulatory changes have contributed to a decline in casino drop across Asia.
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Oliver Grant
Industry Technology Correspondent
Oliver Grant covers the technology and business machinery of iGaming — platform and data deals, AI and compliance tooling, affiliate and marketing shifts, and the quarterly numbers behind them. The reports lead with the announcement, name the vendors and figures exactly as published, and separate genuine capability from press-release promise. When a supplier ships a new engine or a regulator tightens ad rules, Oliver Grant explains what actually changes for the companies involved.
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