Casino, tourism industry push back against proposed fund hike, license renewal rules

Interior of a Paradise Casino [Provided by Paradise Co., Ltd.]

South Korea's tourism industry has mounted a united front against the Ministry of Culture, Sports and Tourism's proposed casino regulations, drawing a line to prevent what it says would be a serious blow to the sector. The pushback marks a significant escalation in industry opposition aimed at protecting the viability of integrated resort development — which requires hundreds of billions of won in investment — and the country's broader tourism competitiveness.

The Korea Casino Tourism Association and other major tourism-related umbrella organizations issued a joint statement Monday calling for the immediate withdrawal of a proposed five-year casino license renewal system and a planned increase in the tourism promotion fund contribution rate.

"The casino industry and tourism-related associations that have led South Korea's tourism sector express grave concern over the Ministry of Culture, Sports and Tourism's plans to introduce a five-year casino license renewal system and raise the maximum contribution rate to the Tourism Promotion and Development Fund from 10 to 15 percent," the statement said. "We solemnly demand the immediate withdrawal of these excessive regulations that threaten the survival of our industry."

The groups said the proposed overhaul would affect the entire tourism ecosystem, which is still working to recover from the COVID-19 pandemic. "Just as we are emerging from the long tunnel of the COVID-19 pandemic and seeking to regain momentum and strengthen global competitiveness, the government's proposed overhaul is nothing more than a punitive regulatory bomb that will dampen investment in national integrated resorts and tourism infrastructure and undermine employment stability for workers in the sector," the statement said.

Jeju Dream Tower integrated resort [Provided by Lotte Tour Development]

On the proposed fund increase, the industry pointed to a structural flaw in the current system: contributions are calculated on the basis of sales, not net profit for the period. The groups noted that nearly half of all operators have continued to pay into the fund even while posting operating losses over the past decade. "Raising the fund contribution ceiling to 15 percent under these circumstances would only deepen companies' losses and hasten the bankruptcy of smaller operators," the statement said.

The industry also said the proposed five-year license renewal system would undermine legal stability and the principle of protection of legitimate expectations. Operators have made sustained investments since a 1994 amendment to the Tourism Promotion Act on the assumption that their licenses were permanent, the groups argued, and subjecting them to the risk of license cancellation every five years would inevitably halt the attraction of global capital and large-scale new investment.

"Introducing a renewal system will cut off the inflow of global capital into Korea and deal a fatal blow that severs the future growth engine of the Korean tourism industry," the statement warned.

The groups also raised concerns about competition from neighboring Asian markets. Macau, Singapore, the Philippines and Japan are all aggressively capturing the integrated resort market through generous incentives and deregulation, they noted. "If excessive fund increases and short-term renewal regulations are used to hobble the domestic industry, South Korea's tourism sector will completely lose its foothold in the global market and fall into a vicious cycle of capital outflow," the statement said.

The coalition called on the government to immediately withdraw the five-year license renewal system, scrap the proposed increase to the tourism promotion fund contribution ceiling, and shift toward growth policies centered on industry needs.

The joint statement was signed by the Korea Camping Ground Association, the Seoul Tourism Association, the Korea MICE Association, the Korea PCO Association, the Korea Tourism Cruise Industry Association, the Korea Tourism Association, the Korea Casino Tourism Association, the Korea Theme Park Association, the Korea Tourism Industry Association, the Korea Hotel Management Association, the Korea Hotel Association and the Korea Resort Condominium Management Association.

terry@heraldcorp.com