The Korea Casino Association has fired at the country’s Ministry of Culture, Sports and Tourism, warning new policies are risking significantly endangering the finances of many operators that are still in a state of recovery.
Numerous economic factors are fuelling challenges for the sector as it continues to recover from the impact of the COVID-19 pandemic.
There were urgent calls for a full review of plans to increase a levy on foreign-focused casinos and introduce a five-year licensing period.
The plans, announced earlier this month, would significantly endanger the finances of many operators that are still seeking to recover from the impact of the COVID-19 pandemic, according to the trade body.
Korea’s Ministry of Culture, Sports and Tourism has proposed increasing casino contributions to the Tourism Promotion and Development Fund from 10% of gross gaming revenue to 15%.
However, the association argued that basing the figure on revenue rather than profits would be overly burdensome for operators, given that they also have to pay other taxes on top of the contribution to the fund.
It also described the decision to introduce a maximum licensing term as ‘undermining the legitimate trust formed by existing operators’, as licensees are now at risk of losing their licence every five years.
“If operators are exposed to the risk of license cancellation every five years, employment instability will grow, and long-term investments involving hundreds of billions to trillions of won could shrink,” said the Association in a statement.
The majority of casinos in Korea are only open to foreign tourists, with Kangwon Land in Seoul being the only one available to locals also.
Japan on the horizon
A major concern for the Korean gambling industry has been the decision by Japan to push ahead with plans to open three casino resorts, including MGM Osaka, which is set to open for business in 2030.
The Korea Casino Association said that any reforms that diminish the finances of casinos could risk pushing players to Japan and other markets in Southeast Asia.
“Major competing countries are fostering their casino industries by opening domestic markets or expanding operator autonomy,” said the body.
“The renewal license system and the fund ceiling increase should be reviewed, and policy direction should shift toward industry development and support.”
Industry figures have previously called for the government to rethink its policy towards locals gambling, as it is estimated over 7 million South Koreans will travel to MGM Osaka and spend an estimated 2.6trn won (£1.4bn) annually once it is open,
Despite being bound by the same restrictions outside the country’s borders, data from the National Gambling Control Commission placed the value of overseas gambling by Korean nationals in 2017 at 4.9 trillion won (£2.7bn) – underpinning the appetite for casinos among Korea’s population.
The majority of money was wagered in the Asian gaming hubs of Macau and the Philippines, highlighting the level of income the Korean Government is missing out on each year.
