South Korea Likely to Limit Casino Tourism Fund Contribution Increase Below Proposed 15 Percent Ceiling
South Korea may cap casino tourism fund contribution increases below the proposed 15% due to profitability concerns and regional competition.Summary
South Korea is likely to limit the increase in casino contributions to the Tourism Promotion and Development Fund to below the proposed 15% ceiling, according to KB Securities analyst Choi Yong-hyun. The current cap is 10%, and the government may opt for a more moderate rise due to industry profitability pressures and intensifying regional competition. Key factors include the anticipated 2030 opening of MGM Osaka, potential hikes in the tourism departure tax, and China's new 20% tax on offshore trust income, which has already contributed to a decline in casino drop across Asia. Despite these challenges, visitor numbers at foreigner-only casinos are expected to grow, though average customer drop may remain subdued until after the October 22 deadline for declaring unpaid taxes. Choi notes that Lotte Tour Development and Paradise Co Ltd could benefit from shifts in Chinese VIP dynamics, with Paradise better positioned due to its diversified customer base. Any final contribution rate below the full proposed increase would reflect regulators' efforts to balance tourism fund goals with casino viability amid mounting external pressures.
(Source：Sccg Management)