South Korea may moderate casino contribution hike to tourism fund
KB Securities expects a smaller rise than the proposed five-point increase
Key Takeaways
- KB Securities believes the South Korean government will likely adopt a more moderate increase than a proposed rise from 10% to 15% of casino revenues to the tourism fund.
- The proposal discussed would raise the current 10% cap to 15%, a five-percentage-point increase that has not been formally submitted, per Shin Jong Ho on 14 October.
- An academic study estimated up to KRW2.32 trillion (US$1.72-billion) could exit South Korea’s annual gaming spend once MGM Osaka opens in 2030.
- China’s July introduction of a 20% tax on offshore trust revenues and an October 22 declaration deadline have contributed to lower casino drop across Asia.
The South Korean government may opt to raise the annual cap on casino contributions to the Tourism Promotion and Development Fund by less than the proposed increase from 10% to 15%, according to a recent memo from KB Securities Co Ltd issued after public discussions. Analyst Choi Yong-hyun cited concerns about sector profitability and a more competitive regional environment, including tax changes in China and the planned opening of MGM Osaka in 2030.
Reasons and figures cited by KB Securities
KB Securities reports that the Korea Casino Association was told the maximum rate per casino to the Tourism Promotion and Development Fund could rise from the current 10% to 15% of annual revenues. The association’s secretary-general, Shin Jong Ho, told GGRAsia on 14 October that the proposal has not been formally submitted by authorities. The Tourism Promotion and Development Fund is referenced here for regulatory context: [Tourism Promotion and Development Fund](/regulation).
Choi wrote in his update:
“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.”
An academic study published on 14 October estimated South Korea’s casino sector could see up to KRW2.32 trillion (US$1.72-billion) exit in annual gaming spend once the MGM Osaka integrated resort with casino begins operations.
Other headwinds and market hopes
KB Securities also pointed to China’s new tax rules as a factor that has reduced casino spending across Asia. In July, the Chinese government introduced a 20% tax on revenues of offshore trusts and required declaration of outstanding taxes by 22 October. Choi said: “The regulatory changes have contributed to a decline in casino drop across Asia.” The memo explains that “drop” refers to money put up by players for chips at a table; see regional coverage in [news on Asian casino drop](/news).
Despite that, the brokerage expects visitor numbers at South Korea’s foreigner-only casinos to continue growing, driven by rising inbound tourism, though the average drop per customer remains constrained. 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.” The note highlights trends specific to [casino](/casino) operations for foreign visitors.
KB Securities highlighted Lotte Tour Development Co Ltd, operator of Jeju Dream Tower, for its potential to grow Chinese VIP visits, and noted that Paradise Co Ltd could be better positioned if Chinese rules tighten due to its more diversified customer base.
Frequently Asked Questions
What is the current and proposed percentage for casino contributions to the tourism fund?
The current cap is 10% of annual revenues and the proposal under discussion would raise it to 15%, a five-percentage-point increase; the proposal had not been formally submitted as of 14 October, according to Shin Jong Ho.
How does Chinese taxation affect casino spending in Asia?
KB Securities says China’s tax changes have reduced casino spending across Asia. In July China introduced a 20% tax on offshore trust revenues and set 22 October as the deadline to declare outstanding taxes, which has constrained VIP spend.
What is the projected impact of MGM Osaka on South Korea’s gaming spend?
An academic study published on 14 October estimated that South Korea’s casino sector could see up to KRW2.32 trillion (US$1.72-billion) in annual gaming spend exit after MGM Osaka begins operations in 2030.
Which South Korean operators did KB Securities highlight regarding Chinese VIPs?
KB Securities highlighted Lotte Tour Development Co Ltd, operator of Jeju Dream Tower, for its potential to attract more Chinese VIP visits, and noted Paradise Co Ltd may be better positioned if Chinese regulations tighten due to a more diversified customer base.
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Emilio Navarro
Industry Technology Correspondent
Emilio Navarro covers the cross-cutting technology and business of iGaming — platforms, data and AI, compliance tooling, affiliate marketing, financial results, and the stories that fit no single rubric. The reports open with the announcement, cite vendors and figures exactly as published, and keep a healthy distance from press-release language. When a supplier unveils a new engine or the advertising rulebook changes, Emilio Navarro reports what genuinely changes.
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