S.Korea casino reform timetable could slip amid industry consultations: sources

South Korea’s proposed changes to casino regulations could be delayed “until later this year,” as the government continues consultations with gaming operators amid industry concerns about the measures. The information was obtained by GGRAsia from multiple South Korean casino industry sources and also carried in a report published on Tuesday by local news outlet Money Today Network (MTN). The country’s Ministry of Culture, Sports and Tourism is seeking to amend the Tourism Promotion Act to raise the maximum Tourism Promotion and Development Fund contribution rate for casino operators from 10 percent to 15 percent of annual gross gaming revenue (GGR), as well as to introduce a five-year licence-renewal system. According to the sources, the ministry had been aiming for the proposed amendment to be introduced in September. The timetable could, however, slip because of the Mid-Autumn Festival holiday – known locally as the Chuseok holiday, running from September 24 to 27 – and the National Assembly’s annual parliamentary audit of the government, scheduled from October 6 to 27. A ministry official told MTN: “We are listening to the industry’s views and continuing to hold meetings with individual operators.” The person added: “We originally aimed to propose [the amendment] earlier, but it has been delayed to allow further industry consultation and internal review. We are aiming to submit the amendment later this year.” The report said the ministry was also considering transitional arrangements for casino operators that had “received licences relatively recently”. The office of Representative Cho Gye-won, who has been leading efforts to advance the amendment, also told MTN that it had yet to receive a draft from the ministry, as “the ministry is still reviewing it”. Shin Jong-ho, secretary-general of the Korea Casino Association, told MTN: “The higher contribution could discourage investment in gaming facilities and expansion.” The proposed increase in the Tourism Promotion and Development Fund contribution would not automatically subject all casino revenue to a 15-percent rate. The ministry has said it intends to create a new, higher revenue band, with only revenue above a yet-to-be-determined threshold subject to the increased rate. The ministry has defended the reform package as necessary to modernise a regulatory framework that has remained largely unchanged for about 30 years. It has also said periodic licence reviews would focus on matters including regulatory compliance, financial soundness and management capability, rather than amounting to a complete relicensing exercise. Casino and tourism industry representatives, however, have called for the withdrawal of the proposals, warning that a higher contribution rate and five-year licence renewals could deter long-term investment, threaten employment and weaken South Korea’s competitiveness against other regional casino jurisdictions.