(SOUTH KOREA) — A Korean lawmaker has introduced a bill to make regional esports tax credits permanent and more expansive, citing regional economic spillovers and the needs of organizers, teams, and venues.
Section 1: Overview of the proposed bill
Kim Seung-soo has proposed an amendment aimed at one specific activity: hosting professional esports tournaments outside the Seoul metropolitan area. The policy tool is a corporate tax credit that reduces a company’s tax bill when it spends money to run qualifying tournaments in the regions.
The headline change is duration. Today’s regional esports credit is time-limited and set to end in December 2026. Kim’s proposal would remove the sunset and extend the incentive beyond that date, so companies could plan around it as a standing feature of the tax system rather than a short-term program.
That difference matters in esports because events are rarely “one-and-done.” Organizers often build a calendar years ahead, then sign multi-year venue agreements, negotiate sponsorship packages across seasons, and line up production partners that want repeat business. A sunset clause can compress those timelines. It can also force companies to price in risk when they do budgeting for tournaments that would take place after the credit expires.
Section 2: Current tax incentive details
South Korea’s current regional esports incentive is structured as a corporate tax credit tied to tournament operating costs. A credit typically reduces tax liability directly. A deduction, by contrast, usually reduces taxable income. That distinction is why planners care about credits when they model after-tax cost.
Under the existing rules described in public summaries, the credit is a 10% corporate tax credit for qualifying operating costs connected to eligible tournaments held outside the capital region. In practice, “eligible costs” is a budgeting concept as much as a tax concept. It usually means costs that can be traced to the event and supported by documentation such as invoices, rental contracts, prize disbursement records, and vendor agreements.
Companies that expect to claim a credit generally need their paperwork to tell a clean story. Which entity contracted with the venue? Who paid vendors? Which costs were for the qualifying tournament dates and scope? Clean contracting and consistent invoicing can matter as much as the rate itself.
Temporary incentives also change procurement behavior. If a tournament series is meant to run for several years, a company may hesitate to commit to multi-year production or venue contracts if the after-tax cost could rise sharply once the credit ends. That uncertainty can ripple into sponsorship pricing as well, since sponsorship deals often track expected costs and exposure across a season.
Section 3: Policy context and rationale
Regional event credits are a familiar economic development approach: encourage spending where policymakers want activity to occur. In esports, the “why” is tied to what a tournament brings into a city for a short, intense window.
Tournament weekends can drive spending on lodging, food, and local transport. They also create short-term hiring needs, from event staff and security to broadcast crews and local vendors. When policymakers talk about regional spillovers, they usually mean that a portion of tournament spending lands with local businesses that are not part of the esports industry.
Predictability is a second piece of the logic. If a credit is reliable over time, organizers may be more willing to pick regional sites repeatedly, rather than treating a non-capital tournament as a one-off experiment. Recurring events can also lead to longer-term partnerships with venues and local governments, such as jointly planned calendars, bundled marketing, and upgraded technical capacity at the arena.
Coordination is often where location-based incentives have their biggest effect. A venue may commit dates earlier. A local government may align tourism support. Sponsors may accept a multi-city story rather than a Seoul-only footprint. None of that is guaranteed, but stable incentives can make those conversations easier to start.
Table 1: Contextual comparison of incentives and KeSPA recommendations
| Aspect | Current policy | KeSPA critique | Proposed expansion |
|---|---|---|---|
| Duration | Time-limited; scheduled to expire in December 2026 | Short windows can deter long-term commitments | Make the regional esports credit permanent beyond 2026 |
| Credit rate | 10% corporate tax credit | Rate may be too low to change location decisions consistently | Increase rate (KeSPA suggests 15-20%) |
| Eligible costs | Operating costs tied to hosting tournaments (commonly described as including prize money and rental-type costs) | Scope is narrow relative to real operating pressures | Expand eligible costs, including broader operating items KeSPA highlights |
| Who benefits most | Event-hosting companies running regional tournaments | Teams face separate cost pressures and temporary support | Expand support concepts to teams, facilities, and domestic-title development |
Section 4: KeSPA research and recommendations
KeSPA has become a central voice in this debate through its report, “Research on the Economic Effects of Esports Tournaments and Measures to Expand Tax Benefits,” which runs over 150 pages. The report frames esports events as more than entertainment. It treats them as regional economic activity that can be planned, repeated, and scaled if incentives match how the industry actually spends money.
Several constraints stand out in KeSPA’s critique. One is timing: short application periods for regional credits can limit who can use the program, even when events are held in the right locations. Another is that support tied to team operations is often temporary, commonly about three years, while team cost structures are long-term and salary-heavy. KeSPA highlights that player salaries can exceed 70% of team costs, and that many teams depend heavily on sponsorship revenue.
KeSPA’s recommendations include raising the credit rate into a 15-20% range and broadening eligible costs. The report also points to areas outside single-event operations, such as support tied to facilities like esports arenas and R&D connected to domestic titles. For stakeholders, the practical question is not only “Will the credit continue?” but also “What spending will qualify if policymakers accept KeSPA’s expansion ideas?”
⚠️ Even if extended, incentives may come with stricter compliance and audit requirements; plan budgets with contingency.
Broader eligibility can increase the value of the credit, but it can also increase documentation burdens. Salary- and training-linked claims, for example, can require more careful allocation methods than a straightforward venue invoice. Facility-linked incentives can also bring longer record-keeping timelines. Companies may want to prepare for tighter substantiation, even if the headline policy is “more generous.”
Section 5: Current status and legislative context
As of February 2026, the bill is at the proposal stage. That status signals intent, not outcome. No passage record has been reported in connection with this amendment, so stakeholders should treat the change as possible rather than guaranteed.
For planning purposes, “proposal stage” often means uncertainty on three points at once: whether the sunset will be removed, whether the 10% corporate tax credit rate will change, and whether eligible costs will expand toward the broader operating expenses KeSPA discussed. Organizers and sponsors can respond by building scenario budgets. One scenario assumes the credit ends in December 2026. Another assumes an extension. A third assumes both an extension and a higher rate.
High-level touchpoints to monitor are straightforward. Committee discussion can reshape the scope. Floor votes determine whether it advances. Promulgation and effective-date rules then determine which events and which costs qualify. Companies should avoid contracting assumptions that require the credit to exist, unless contracts also include flexibility.
✅ What organizers, teams, and sponsors should monitor: bill status, potential sunset removal, and any expanded eligible costs or higher credit rates.
Section 6: Implications for stakeholders
Event organizers sit closest to the credit’s immediate value. A permanent incentive could support longer event pipelines outside the Seoul metropolitan area, including multi-year venue relationships and earlier date holds. It could also change procurement choices, since vendors may offer better pricing when they see repeat bookings. Accounting readiness becomes a competitive factor here. Clear scopes of work, consistent invoice descriptions, and contracts that match the actual event footprint may reduce disputes later.
Teams experience the policy more indirectly today, but KeSPA’s recommendations point toward a wider conversation about team operating costs. If eligible costs expand toward salaries and training, teams and organizers may renegotiate how costs are shared and who claims what. Partnerships with regions could also change, with teams participating in longer regional programs rather than single tournament appearances.
Sponsors and venues may see geography shift. A stable regional credit can make it easier for organizers to pitch a circuit model across multiple cities, rather than concentrating events in the capital. Sponsorship negotiations may then focus on multi-event exposure, local activations, and hospitality tie-ins. For venues, the business case improves when they can point to recurring esports dates and predictable organizer demand. Paperwork still matters. Sponsors typically want clean deliverables, and venues need contracts that show exactly what is being rented and when.
Local governments and regional economies may benefit most when events repeat. One tournament can create a weekend bump, but a series can create demand patterns that hotels, restaurants, and transit services can staff for. Capacity planning becomes part of the discussion, including internet reliability, crowd management, and nearby lodging supply.
International organizers and globally distributed esports staff could face a secondary effect. If regional incentives make certain cities more attractive, international teams may base bootcamps or production work around those hubs, sometimes with remote collaboration across borders. That said, this article focuses on tax incentives for event hosting. Remote-work or digital nomad policies are separate frameworks, and they should not be treated as part of the esports credit itself.
This article analyzes tax policy and legislative developments related to esports and regional incentives; it is informational only and not legal or tax guidance.
Readers should consult qualified professionals for personalized tax or policy advice.
