Gambling in South Korea is strictly regulated, with only specific activities permitted by legislation. The gambling industry in South Korea is managed by the National Gambling Control Commission which has three regulatory bodies that cover different gambling markets. These are:
- The MCST (Ministry of Culture, Sports and Tourism)
- The MAFRA (Ministry of Agriculture, Food and Rural Affairs)
- The MOSF (Ministry of Strategy and Finance)
Each regulator covers a different gambling market with the MCST regulating sports and casino betting. The MAFRA regulates gambling on traditional bullfighting and horse racing, while the MOSG regulates the country’s lottery.
The South Korean casino industry prohibits residents from betting apart from Kangwon Land. This is the only casino that South Korean residents are able to bet in.
Because of these strict rules, the South Korean casino industry relies solely on foreign customers. Despite these limitations, the industry is reporting record profits and growth. In 2021, Korean casino and integrated resort operators Paradise reported sales of $72.6 million for June, showing a dramatic 634% increase on the previous year’s figures.
These incredible numbers could lead to authorities exploring the potential of online casinos in the future. At present, online gambling in South Korea is strictly prohibited.
The country’s Criminal Code states under Article 246 that illegal gambling is punishable by a fine or imprisonment. Initial fines of up to KRW10m ($7,500 to $8,000) can be issued for first-time offenses. Habitual offenders are subject to more stringent penalties including fines of up to KRW20m ($15,000) or up to three years in jail.
Those who do want to gamble online are able to use foreign, offshore sites, often using cyptocurrency, which is possible through e-wallets.
According to business2community.com, an increasing number of safe casinos have introduced blockchain technology lately. These crypto casinos use this technology to allow users to prove the legitimacy of a betting site by holding accurate records securely. This allows online gamblers to enjoy fair and transparent casinos without the risk of fraud, and also allows them to operate in jurisdictions where fiat currency gambling is not permitted yet.
However, South Korea typically blocks ISPs, so a VPN may be needed to get around these restrictions. Because these sites are unregulated by the local government, it is essential that gamblers check the safety of the site. Checking that the casino is licensed and audited by third parties, and offering strong security are key ways to ensure an online casino is safe, no matter where it holds a licence. Players must also check who develops the games on-site and ensure the quality of SSL encryption technology for withdrawals and deposits is high.
It seems unlikely that the regulatory bodies in South Korea will change online gambling rules as long as residents are prohibited from using casinos, so in the meantime, locals will need to keep themselves playing safely with the tips above. The potential for enormous revenues through taxation and license fees could help to sway them in time, especially if the casino industry continues to grow.
Many South Koreans use foreign sites to bet on a wide variety of markets, and should the government pursue new legislation it could see many of these use domestic online casinos instead. This will not only stimulate the economy, but it can offer further protection to gamblers as sites will have to be regulated.
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