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Kangwon Land licence extension comes with tax hike

Kangwon Land reopened last week after closing due to Covid-19 countermeasures.
Kangwon Land reopened last week after closing due to Covid-19 countermeasures.

Kangwon Land’s licence would be extended until 2045 in return for a tax increase.

South Korea.- The National Assembly has put forward a proposal that would extend the casino licence for Kangwon Land by 20 years after its current 2025 expiry in exchange for a bigger slice of revenue.

The proposed Special Law on Development of Abandoned Mining Area would apply a 13 per cent direct tax on GGR to replace the current 25 per cent tax on profit before tax (PBT).

According to JP Morgan, by taxing GGR instead of profits, the government can all but guarantee at least some form of revenue from Kangwon Land each year.

The move would effectively increase the rate charged on profit before tax (PBT) to around 31 per cent on a like-for-like basis. Kangwon Land, the only casino in South Korea that can take bets from locals, continue to pay the 10 per cent standard gaming tax on GGR that is charged to all casino operators.

It noted that the new formula would reduce forward earnings per share estimates for 2022 onward, by about 6 per cent.

The South Korean casino has recently reported an adjusted loss of KRW275.88bn (US$249.7m).

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