Wednesday, June 26, 2024
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Korea clamps down on gambling businesses exploiting legal loophole

The South Korean government recently announced the implementation of new guidelines to address businesses engaging in what officials call “pseudo-casino operations.”

This move aims to close legal loopholes that have permitted de facto gambling at establishments like poker-themed bars, commonly known as “hold’em pubs.”

Developed collaboratively by the Ministry of Culture, Sports and Tourism, the National Police Agency, and the National Gambling Control Commission, these guidelines specify the criteria for identifying and prosecuting such operations. This initiative follows a recent amendment to the Tourism Promotion Act.

In February, Article 26 of the Tourism Promotion Act was revised to include a clause defining casino-like operations as those where non-casino operators provide gambling activities that result in financial gain for certain users while causing losses to others. Offenders can face up to seven years in prison or fines up to KRW 70 million ($51,000).

Under South Korean law, specifically Article 246 of the Criminal Act, gambling is generally prohibited, except for minor bets made for entertainment and at certain government-authorized facilities. The only legal casino for South Koreans is Kangwon Land Casino in Gangwon Province, established under the Special Act on the Assistance to the Development of Abandoned Mine Areas in the 1990s.

Despite these restrictions, several local hold’em pubs have been offering gambling services where patrons can convert points into cash or other rewards, effectively operating as small-scale casinos.

The new guidelines classify these activities as pseudo-casino operations, aiming to eliminate illegal gambling at hold’em pubs. The guidelines also clarify that any games promoting repeat visits through reward points or credits are considered illegal profit-seeking operations by non-casino entities.

The revised rules under Article 26 specify the types of games classified as casino operations. These include slot machines and various table games such as roulette, blackjack, dice games, poker, baccarat, bingo, and mahjong. This comprehensive list ensures that a broad range of gambling activities falls under regulatory scrutiny.

Frank Schuengel
Frank Schuengel
Frank Schuengel is an online gambling industry veteran with over twenty years of experience in Europe and Asia. Equally at home in the Isle of Man and the Philippines, he started his career as a sports trader before setting up and running whole operations, and more recently focusing on the regulatory and licensing side of things in the worlds of fiat and crypto eGaming. When he is not writing about gambling topics, he can be found cycling around Manila and advocating sustainable transport solutions for a Philippines based mobility magazine.



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