Casino revenue, fund contributions and permit renewal

Casino revenue is the basis for contributions to the Tourism Promotion and Development Fund. The Ministry of Culture, Sports and Tourism says a future reform would establish a new high-revenue band and a renewal-permit system.

The ministry says the current system uses revenue-based rates of 1%, 5% and 10%; casino revenue is the money received from customers less the money paid to them. A proposed 15% rate would apply only to revenue exceeding a new high-revenue band, rather than applying to all revenue currently subject to the 10% rate. Contributions are assessed by individual casino venue, not by corporation.

An operator that runs four foreigner-only casinos in Seoul, Incheon, Busan and Jeju recorded July casino revenue of 77.9 billion won, up 25.8% from June and 3.6% from a year earlier. A three-casino foreigner-only operator posted 41.7 billion won, a 12% rise from the previous period and a 6.9% gain from a year earlier. Lotte Tourism Development reported 51.6 billion won, up 5.8% from the previous period and 18.8% from a year earlier, with January-to-July revenue up 33.3% to 317 billion won. The company said the operating leverage effect was expected to become more pronounced this year.

At Kangwon Land, the country's only casino open to both Korean nationals and foreigners, second-quarter revenue fell 8.8% from the first quarter and 4.2% from a year earlier to 346 billion won, while operating profit dropped 37.3% from the previous quarter and 26.2% from a year earlier to 43.2 billion won.

The ministry says foreigner-only casinos do not face the additional payment obligations applied to Kangwon Land: a 13% closed-mine fund contribution and a 0.35% addiction-prevention-and-treatment contribution, in addition to the 10% tourism-fund levy. They are not subject to entry-guest taxes or customer betting limits.

The renewal-permit system would replace indefinite permits with periodic reviews of whether operators still meet their original permit conditions, including management capability and financial soundness, and existing operators would receive a grace period. The ministry says detailed progressive bands will be set in an enforcement-decree amendment after discussions with casino operators, experts and academics.