Organized crime controls gaming rooms: report

A Korean government report has confirmed that most "adult video game rooms" are managed by organized crime syndicates, which also have a monopoly on the distribution network for the "gift certificates" given as prizes in order to avoid laws regarding cash awards.

A National Intelligence Service (NIS) report titled "The Urgent Need to Eradicate the Abuses of Gambling Game Rooms to Clean Up Social Evil," given to the presidential office last month and obtained by The Hankyoreh, also finds that tax evasion in the adult game room and "adult PC (personal computer) room" industries totals 8.8 trillion won (9.14 billion USD) yearly. The game rooms, which prohibit access by minors, provide video or computer games which often feature components of gambling.

The NIS report details the activities of specific crime syndicates and explains how they are using money from computer game rooms and illegal casinos to fund their operations. It states that organized crime evades 4.5 trillion won in taxes from adult game rooms and 4.3 trillion won from PC gambling rooms each year. The NIS estimates that the market for adult game rooms, PC gambling rooms, and illegal casinos amount to 50 trillion, 36 trillion, and 2 trillion won, respectively. The Hankyoreh has learned that the NIS sent the report to the presidential office last month.

According to the NIS, 9.3 percent of Korea’s population - or 3.2 million people - is addicted to gambling, close to four times as much as Canada, where 2.6 percent of the population is addicted, and Australia, where 2.1 percent of the population suffers from gambling addiction.

The report says that even in small cities with fewer than 50,000 residents there are on average three to five mafia-operated game rooms, a phenomenon it says is sucking the life out of local businesses. In the small town of Pyeongchang, Gangwon Province, for example, there are 24 game rooms that together take in between 2 million won to as much as 10 million won every day. Nationally there were 11,000 registered game rooms in 2003, but the NIS estimates that their number has risen by 15 percent annually and that today they number 20,000, including ones that are unregistered and therefore illegal.

The report even quotes specific rumors about local officials accepting bribes from these gambling establishments. Among other government agencies, the report names the police station in Seoul’s Gangnam neighborhood as rumored to be on the take from a casino in Samseong-dong.

Aug.25,2006 The Hankyoreh