Gaming laws across the planet are in a constant state of change as governments and private businesses hustle to grab revenues wherever they can. To help our readers keep up with these developments, CAP is taking a closer look at the current state of igaming in a number of key markets. Last week we looked at the very challenging German gaming market and found that government interference holding the industry back. This week we’re looking at South Korea where a lack of government oversight is the real problem.
Stop me if you’ve heard this one before. There’s a country where online gambling isn’t illegal, but collecting any winnings from online gambling is illegal. No, it isn’t the United States, it’s South Korea.
That’s led to a South Korean iGaming market that would look familiar to anyone who has played an illicit gambling machine at their local bodega. But because South Korea is one of the biggest video game sectors on the planet, online gambling sites are much more plentiful than a few fruit machines in dingy back rooms.
How Korean iGaming Works
Korean gamblers have no problem logging onto any one of hundreds of grey market gambling sites operating in the country. They pay for their gaming with the same type of virtual currency used on Zynga’s Texas Hold ‘Em and other online games.
But here’s where Korea veers off track. Korean law places a limit on how much Internet currency an individual can cash out each month.
Gamblers who want to cash in larger amounts of virtual currency have to venture out of their houses to see a money changer. These currency changers operate semi-openly, but leave plenty of room for fraud and intimidation. After all, if you get ripped off while collecting illegal gambling winnings, who will you complain to?
Korean officials occasionally bust up gambling operations as they did back in 2008, but the impact has been minimal. Just recently a stash of Internet gambling cash worth over $10 billion won (around $8.8 million US) was found buried in a Korean garlic field.
Recommended Reading: Online Gambling in Asia and New Zealand
Regulation Deficit
Unlike a lot of other countries, the Korean government doesn’t seem motivated to crack down on Internet gambling. In the past decade a number of bills aimed at regulating the business have failed to make much headway through the Korean legal system.
Lawmakers have been more interested in adding layers of regulation to legal land based betting and casino operations. This may have something to do with a rash of gambling scandals involving high profile Korean politicians.
Currently, the online gaming situation in Korea seems to be at a standstill.
Asia Rising
Most gaming industry insiders agree that the Asian gaming market is set to explode. When it does take off, it’s expected to make the North American sector look like peanuts.
We already know that there’s no shortage of gambling enthusiasts in the Far East. It’s been estimated that the two legal, land-based casinos in Singapore are set to rake in more in 2011 than all the casinos in Las Vegas combined!
This makes Korea’s foot dragging on iGaming a bit of a head scratcher. Still, as more and more countries move to regulate, and tax, online gambling it seems likely that Korea will have to make a move one way or the other.
Do you have any experiences with the Korean iGaming market? Let us know on our Online Gambling Laws and Regulations Forum