The Jeju provincial government in South Korea said this week it has launched a study aimed at increasing the tax yield from the holiday island’s casinos. The results of the study will be announced in July, said Korea Bizwire, an online news outlet.
“The study aims to devise methods to increase taxes by fully investigating the sales revenue of the gambling industry in the province,” reported Korea Bizwire. In addition, the provincial government will make detailed plans to return taxes to local communities, it added.
Jeju officials will compare and analyse the taxation rate of casinos in other jurisdictions, as well as methods to increase tax revenue from the industry, said the media outlet.
It is not clear from the report whether Jeju either plans or has the powers to raise fresh taxes on its local casino industry, or whether it simply wants to make more efficient the system for collecting current taxes.
Jeju does have some special concessions granted to its tourism industry by the central government. The island is popular with mainland Chinese holidaymakers and offers them visa-free entry to Jeju if they arrive directly by international flight or international ferry or cruise ship. Mainland Chinese visitors to other parts of South Korea need a visa.
According to the University of Nevada, Las Vegas’ (UNLV) Center for Gaming Research, South Korea’s casinos are regulated by the country’s National Gambling Control Commission, and there is an effective rate of 20 percent on casino gaming revenues.
The Jeju Island governor Won Hee-ryong had suggested in October last year that he would push for a revision of gaming taxes and to establish a Singapore-style casino watchdog.
South Korea currently has 16 casinos for foreigners-only and one for locals, according to UNLV’s Center for Gaming Research. There are currently eight operational casinos in Jeju.
Genting Singapore Plc, a subsidiary of Malaysian conglomerate Genting Bhd, has partnered with mainland China real estate developer Landing International Development Ltd to build a US$1.8 billion foreigners-only casino resort in Jeju. The companies broke ground on its Jeju project in February.
High-quality casino resorts in Jeju could benefit from the growing number of Chinese tourists to the island, stated a note from Union Gaming Research Macau Ltd in February.
The number of Chinese visitors to Jeju jumped 58 percent to 2.9 million people in 2014, according to South Korean government data. The visitors accounted for almost half of the 6.1 million Chinese tourists to the whole of South Korea that year.
South Korea’s national government plans to approve two more foreigners-only casino licences this year to boost tourism, with operators expected to invest at least KRW1 trillion (US$916.3 million) each. The government didn’t specify a location for the new licences.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia