Gambling News by Gambling Headquarters

South Korea reiterated its tough stance on the gaming industry Friday after an audit agency held the government responsible for rampant illegal gambling and referred a list of big names to the prosecution. Controversy over video arcades has rocked the nation since August, leading President Roh Moo-hyun and Prime Minister Han Myeong-sook to offer apologies. The major opposition Grand National Party accused the government of bending the rules to feed the gaming industry. South Korea strictly regulates gambling. It has only one casino available for locals, while 16 others exist for foreigners. While the government loosened rules to help boost its game industry in recent years, its loose oversight also let illegal gambling prosper in video arcades and Internet cafes. The arcade game industry surpassed 20 trillion won (US$20.9 billion) last year, an amount that is almost equal to the country's national budget, with the majority of consumers being in the lower-income bracket. Current Culture Minister Kim Myung-gon accepted the criticism and reiterated the current stance to crack down on illegal gambling. "As the main government branch in charge of the gaming industry, we offer an apology to the public for causing such a big controversy," Kim said in a press conference. The intense inspection forced nearly 9,500 game parlors and 5,000 Internet cafes nationwide to be closed for illegal operations, he said, and the police have arrested over 3,600 illegal operators. Also, the ministry will abolish all gift certificates circulating in game parlors. Gift certificates, used as cash equivalents in arcades, have fed the game operators with vast commissions. After a months-long investigation on Thursday, the Board of Audit and Inspection of Korea held the government accountable for failing to curb illegal gaming. It transferred a list of former and incumbent top officials to the prosecution on allegations of overseeing illegal gambling or bending the rules. The list reportedly included Chung Dong-chae, the former culture minister and lawmaker from the Uri Party, and two former vice culture ministers, Bae Jhong-shin, who held the post from 2002 to early 2006, and his successor Yoo Jin-ryong.

The prosecution refused to disclose the names on the list, saying the investigation is now in its budding stage, but suggested the accused may be summoned for questioning.

"If they were on the list, the prosecution will decide whether to summon them after analyzing related documents," a prosecutor who asked not to be named said, referring to Chung and two others.

The controversy centers on the "Sea Story," an arcade gambling program released to game cafes in 2005 with government permission. When a player inserts cash into a machine with the program, images of squids, clams, sharks and other sea creatures spin and stop. If they form a certain arrangement, the player hits the jackpot.

The game machines paid out larger winnings than were legally permitted, which made the program highly addictive.

The issue has gained public and media attention after the vice culture minister Yoo Jin-ryong, who sought to curb illegal gambling, was dismissed just six months into his tenure in August. The Grand National Party claimed his dismissal was a retaliatory act by the presidential office because he allegedly clashed with aides of President Roh over administrative issues, including his initiative to root out gambling with arcade games.