According to a report on Asia Gaming Brief, Union Gaming analysts noted that Seoul possibly rejected the proposition so as not to scare away the billions of dollars that is soon likely to be invested in the nation’s least populated province.
“We believe that the national government quite possibly rejected the call for higher taxes in Jeju as it does not want to scare off billions of dollars of integrated resort-related capital either already under construction or moving towards construction,” said Grant Govertsen from Union Gaming.
In addition to increasing the tax rate from its current figure of 10%, the failed proposal also included the implementation of three-year license renewal audits and restrictions on the transferability of casino licenses.
Union Gaming declared that the news is especially positive for casino operators such as Genting Group, which plans to open its new $1.8 billion Resorts World Jeju late next year, although the local government is moving forward with a controversial proposal that would see licensees lose the ability to pay tax on gross gaming revenues after deducting junket commissions. Jeju casinos currently pay a 60% revenue share to junkets, which is 15% higher than that shelled out in Macau, but benefit from a consequent tax rate of only 4%.
“By eliminating the ability to deduct junket commissions, the effective VIP gross gaming revenues tax will go up to 10%, representing an increase of 150%,” said Govertsen.