At a National Assembly forum on casino regulation in July, one casino operator chartered buses so that as many of its executives and employees as possible could attend. A month later, a policy discussion at the Korea Press Center in Seoul was also packed with industry officials. For an industry that usually avoids speaking out in public, filling the seats at outside events two months in a row was unusual.
The industry is on edge because the Ministry of Culture, Sports and Tourism has moved to overhaul casino policy. The government is considering raising the top contribution rate for the Tourism Promotion and Development Fund paid by casinos to 15% from 10% and introducing a licensing system that would require renewal every five years. Industry concerns have delayed the bill, which had been expected to be introduced in August. The government is now examining supplementary measures rather than pushing ahead.
The government's case has merit. Preparing for an era of 30 million foreign visitors requires more money for tourism infrastructure. Discussions are also under way to raise the departure levy to as much as 20,000 won, after it was cut to 7,000 won from 10,000 won, to make up for the lost revenue. And as the casino market has grown, there is no reason it should be exempt from shouldering a larger public burden.
But if the burden is to rise, the conditions for investment must be created alongside it. Over the past decade, foreigner-only casino operators paid 1.2118 trillion won into the tourism fund, yet casino companies received loans from that fund in only two cases over the same period. Hotels can borrow up to 15 billion won in facility financing to build or expand, but casinos cannot borrow for new construction or expansion at all. Even to upgrade facilities on their premises or bring in new machines, their borrowing is capped at 3 billion won.
The environment differs from Japan's. Japan imposed a heavier burden on the industry but also guaranteed a business period long enough for long-term investment. The casino at the Osaka integrated resort, due to open in 2030, will pay 30% of total gaming revenue. In return, it was designed as a 35-year project premised on investment of more than 1.5 trillion yen, and the domestic market was opened as well.
Casino policy should be debated in a way that strictly manages gambling risks while also building competitiveness as part of the tourism industry. To make an era of 30 million visitors a reality, the country must create conditions for private investment to keep flowing into the facilities and content that draw foreign tourists. Treating casinos as a tourism industry only when collecting money will not do.
