In the wake of its study revising upward the economic impact of esports competitions, the
Korea e-Sports Association did not simply listen to the stakeholders it interviewed; it also used the opportunity to put forward
a series of concrete proposals.
The 150-page report, delivered in December 2025, includes an ambitious policy component.
While the figures from the
MEEI (Multi-layered Esports Economic Impact) model developed by the KeSPA call for caution, the association’s recommendations speak plainly about the structural fragilities of an ecosystem that Korea nonetheless likes to present as a national flagship. Beyond a dedicated taxation section, the report also outlines proposals regarding the acceptance of betting and the creation of a far more comprehensive and structured training ecosystem.
Authorize esports betting
A first section addresses
the integration of esports into Sports Toto, the only legal sports
betting system in South Korea. This state-run betting system currently covers football, baseball, basketball, volleyball, and golf. Approximately
33% of its revenue is directly allocated to the National Sports Promotion Fund, which finances infrastructure, school sports, para-sports, and athlete support programs.
Esports is currently excluded from this scheme, and that is also the association's focus: to capture a portion of this support.
Across its 150 pages, the KeSPA argues that such integration would help finance second-division leagues, regional teams, and player transition programs, while also capturing an already existing demand. As in many countries, in the absence of a legal offering, many Korean bettors turn to foreign platforms or illegal websites whose revenues do not contribute to the public fund.
The study also explores the creation of a
dedicated integrity body, referred to as “K-
ESIC,” as a prerequisite to educate and monitor esports participants. The ESIC, for “Esports Integrity Commission”, is the industry-leading integrity body and a partner of ESL, BLAST, and HERO Esports, responsible for monitoring match-fixing and suspicious betting activity, although its enforcement powers remain limited.
However, this ambition has run up against political reality for several years. As early as January 2023, Inven reported that the Korea Sports Promotion Foundation, the LCK, and KeSPA were actively negotiating to include League of Legends in Sports Toto as early as the 2024 Spring Split. The operator’s interest dated back to the COVID-19 period, when esports provided a viable betting product while traditional competitions were suspended.
In April 2024, however, the government rejected the proposal, citing concerns over youth gambling risks. KeSPA renewed its push in May 2025, approaching the Democratic Party, which holds a majority in the National Assembly, but failed to secure a firm commitment.
The obstacles remain structural: legislative amendments would be required, concerns over underage gambling persist, and, crucially, cooperation from game publishers, as intellectual property holders, is essential. KeSPA, in the report, has proposed incentivizing publishers through a 1-2% royalty on betting revenues to be reinvested by the rights holders into the development of South Korean esports.
Protecting South Korea's appeal
Within the report, we learn that companies organizing esports competitions outside the Seoul metropolitan area currently benefit from
a 10% tax credit on operating expenses under the Restriction of
Special Taxation Act. However, this measure includes a
sunset clause set for December 31, 2026, preventing any long-term planning for events seeking to take place in South Korea, even though the country remains highly attractive, as evidenced by
MSI 2026 and Worlds 2027 being hosted there.
The report therefore recommends making this tax credit permanent and even increasing it to 15 to 20 percent, showing that the KeSPA does not merely intend to preserve the existing framework. The association also proposes expanding eligible expenses to include marketing, temporary staff, and broadcast production, as well as extending the duration of support for newly established teams. Its main argument is that the Korean film and audiovisual industries already benefit from similar mechanisms, and esports deserves the same treatment, particularly given its recent exposure.
This push from the KeSPA is accompanied by a carefully prepared political agenda. On February 19, one day before the report was presented in an article published on the association’s website,
lawmaker Kim Seung-soo introduced an amendment to the
Restriction of Special Taxation Act aimed at extending tax benefits for regional esports competitions. Also, he had already secured, in May 2025, a favorable response from Korea Sports Council president Yoo Seung-min regarding the integration of esports into national sports competitions. According to him, “
government support is essential for Korea to maintain its position in the international market.”
Establish a proper development system
The KeSPA also proposes building a pyramid-shaped ecosystem inspired by the K-League in football. At the base, a school esports program, including clubs and extracurricular activities, is designed to broaden participation and normalize the sector. At the intermediate level, regional semi-professional teams are supported by local governments under a public-private partnership model. At the top, existing professional leagues such as the LCK (
League of Legends Champions Korea).
The objective is to offer players a structured pathway from school to the professional level, as well as viable post-career opportunities in coaching, data analysis, or officiating. To support this architecture, the study recommends new targeted tax credits for dedicated infrastructure such as arenas, training centers, and broadcast studios; for the R&D of domestic esports titles and related technologies; and for training and talent identification programs.
Salary expenses exceed 70% of club budgets
Beyond its proposals, the study also offers a lucid assessment. According to the KeSPA, esports clubs, whose payroll expenses exceed 70% of their budgets, operate under chronic deficits, which comes as little surprise. Over the first three years of the franchise system (2021–2023), the ten LCK teams accumulated over
KRW 100 billion (USD 70 million) in combined losses, according to figures cited in the report. T1, arguably the most iconic organization in esports, recorded KRW 32.8 billion (25.2 million USD) in revenue in 2023 and an
operating loss of KRW 12 billion (9.2 million USD).
Based on the association’s consultations, game publishers fund on average more than 90% of the operating costs of top-tier competitive leagues. This “structural dependence on IP” is identified in the report as the sector’s primary risk. Leagues, therefore, do not function as autonomous profit centers but as marketing cost centers serving the lifecycle of game titles.
Unlike traditional sports, media rights cannot provide an alternative revenue stream: esports is primarily broadcast free of charge on Twitch and YouTube to maximize audience reach, making exclusive broadcasting rights virtually unsellable. Facing competition from emerging countries cited in the report, such as Saudi Arabia, China, and France, Korea, described as a “pioneer country” of esports, risks being overtaken if it fails to shift from a cultural promotion logic to a genuine industrial policy approach, according to the KeSPA.
