The South Korean government revealed
several changes last month that are likely to strangle the growth of its young gaming
industry.
South Korea’s Ministry of Strategy and Finance has announced plans to double the tax on casino gaming revenue to 20 percent as of January 1, 2009.
The planned tax increase, reported by Bloomberg, follows a recent statement from the National Gaming Control Commission that it wants to limit the gaming industry’s revenue to about $12.5 billion annually.
Paradise Group, which operates six casinos around the nation, said in a statement: “Imposing a 20 percent tax on companies suffering from stiffer competition and falling profit is just like they are telling us to shut down shops. If they take away 20 percent of net sales, most of the companies will go out of business.”
The new plan does include tax reductions on income and elimination of certain property taxes.
The government also wants to introduce an e-card system that would place a limit on the amount a player could lose and impose stricter control over new players looking to participate in gaming of all forms.
The National Gaming Control Commission said its intent is to limit the amount gambled in casinos, on horse racing and on lotteries, according to an article from Bloomberg. The commission wants to limit the amount spent industry-wide to 14 trillion won annually, about $13.4 billion.
South Korea currently has only one legal casino that allows Korean citizens to play.
Bloomberg quoted Jeong Woo Cheol, an analyst at Mirage Asset Securities, who said, “I am not sure the government’s plan will be realized as gambling operators will firmly resist it.”
The commission is expected to complete its plan in September.
South Korea Moves Disturb Gaming Industry
