The South Korea government has voted to amend the Enforcement Decree of the Special Act on Support for Abandoned Mine Areas, confirming a revision to the law that will see Kangwon Lands casino license extended for 20 years until 2045.
The Cabinet vote comes after the Trade, Industry, Energy, SMEs and Startups Committee of the National Assembly agreed on the revision in March. The extension is granted in return for a greater slice of Kangwon Lands extensive revenue pie by adjusting the current 25% on profit before tax (PBT) to a direct 13% tax on GGR, effectively increasing the rate charged on PBT to around 31% on a like-for-like basis.
According to local media reports, the Ministry of Trade, Industry and Energy is estimating tax revenues of KRW200 billion (US$171 million) per year of KRW5 trillion (US$4.3 billion) total for the duration of the extended license.
The implementation of new taxation rules are likely a direct response to a decline in taxation revenue in 2020 due to Kangwon Land printing a KRW275.88 billion (US$249.7 million) loss for the year as a result of COVID-19.
With the revision of the Special Abolition Act, funds are paid regardless of whether Kangwon Land is profitable or not, so it is expected that stable financial support will be possible for the abandoned mine area in the future, an official is quoted as saying.
Located 150 kilometers (93 miles) from Seoul, Kangwon Land the only South Korean casino at which locals are allowed to gamble was borne out of Koreas conversion to gas and oil for energy, leading to the closure of mines in Gangwon province in 1989.
Legislation in 1995 encouraged redevelopment of abandoned mining areas, prompting local, provincial and national authorities to found Kangwon Land Inc, which is 51% government owned and overseen by the national Ministry of Knowledge Economy.