South Korean casinos want the government to abandon plans to introduce a five-year renewable permit system and hike their contributions to a central tourism fund.
Since the Ministry of Culture, Sports, and Tourism unveiled its plans last month, casino operators’ share prices have taken a tumble, and financial analysts have adjusted their earnings forecasts downward.
The ministry says it may push to raise the percentage of revenues that operators must pay into the Tourism Promotion and Development Fund to 15%. Casino operators currently pay 10%.
The same ministry also wants to eliminate the existing permanent concessions program in favor of a five-year licensing system. The new system would involve numerous new compliance checks and application protocols.
Some casino-related groups say that if operators end up paying higher bills, jobs may be at risk, the South Korean media outlet Dailian reported.
“If fund contributions increase, companies will have no choice but to cut costs,” said Hwang Joo-ho, Secretary General of Paradise City’s Labor Union. “That is highly likely to lead to reduced labor costs, fewer new hires, and cuts in both wages and benefits.”
The contributions hike plan comes on the back of a record-breaking year for South Korean tourism. Visitor numbers and revenues are up at several top South Korean casinos, including Jeju Dream Tower.
South Korean Casinos Warn of ‘Negative Impact on Employment’
The ministry’s proposals would require lawmakers to amend the Tourism Promotion Act.
The proposals include creating a new high-revenue bracket for the largest casino operators.
They also include a mandatory prior screening process for firms or individuals seeking to become major or minor shareholders of South Korean casino operators.
While the proposals are still far from becoming law, casinos say some investors are already spooked and want out of the market.
Lee Jang-sung, Director of Finance at the Jeju Dream Tower operator, Lotte Tourism Development, said the increase in funds could affect both new investments and existing financing.
“Institutional investors who invested $50 million worth of convertible bonds have requested early redemption,” said Lee. “That has created a situation where we must repay them immediately. And financial institutions are [taking] a negative view on refinancing-related matters.”
Labor Chiefs: ‘We Weren’t Consulted’
The National Casino Labor Union Council, a group that comprises representatives of South Korea’s biggest foreign-passport-holder-only casinos, has also petitioned lawmakers to intervene on their behalf.
The council warned that the rate of increase in the fund contribution could adversely affect workers, leading to a deterioration in conditions.
It said the risks of the hike “go beyond a simple increase in costs for operators.”
Kang Byung-doo, chairman of the Paradise Casino labor union, added that, while the ministry consulted with casinos prior to drafting its plan, there “was no dialogue with workers.”
Kang said employees’ wages, benefits, and employment status may be at risk if the plan comes to fruition.
Union chiefs added that casino staff are not the only people who could feel the knock-on effects.
Most South Korean casinos operate in integrated resorts. This, said the union leaders, means hotel, staff, events facilities employees, and tenant firms could also face rising costs or job uncertainty.
Financial Concerns
Critics added that the hike could also drive some operators into great financial difficulty.
They noted that the ministry proposes requiring operators to make higher contributions based entirely on revenues, without taking net profits into account.
Even under the current 10% contribution rule, Incheon’s Inspire Casino paid almost $20 million into the fund last year, despite posting FY2025 operating losses of $30 million.
Last month, the Governor of South Korea’s North Jeolla Province unveiled a controversial plan to create a new casino to be built on reclaimed land.
The province wants the government to allow the casino to admit domestic passport-holders.
