Surveillance & Report
System of illegal Gambling
Prevention & Treatment
The CAP system aims to minimize the social side effects and lead the sound enhancement of the gambling industry. Under this system, for a certain period the maximum number of business premises is controlled and the rate of sales increase of in the gambling industry is kept at an appropriate level. Therefore, the system is expected to function as a means of preventing excessive expansion of the industry for a certain period of time.
The portion of total turnover of the gambling industry to GDP has been decreasing (0.64% in 2008 → 0.62% in 2011). The portion at or near 0.58% will be aimed until 2018.
Concept of the CAP
|Total Amount||· The whole quantity or weight|
|CAP||· The upper limit or maximum limit (of price, wage, and others determined based on legislation or agreement)|
|Legal Notion||· Number of premises, amount of sales, and others of collective gambling businesses or within a particular gambling company|
|integrated Notion||· The concept of the upper limit or maximum limit (CAP) for the gambling industry|
Procedure to set up the CAP
The core subject in setting up the CAP of gambling industry is to investigate the optimum level regarding the gambling industry and establish the upper or maximum limit. The CAP of the gambling industry is set up by following the procedure shown below.
According to the 1st National Master Plan for Responsible Gambling in 2008, the CAP regarding the proportion of GGY to GDP of the gambling industry was set up at the level of 0.54% by 2018; but it will be decided whether to modify the CAP in 2016 according to changes in gambling sales and social circumstances between 2014 and 2015.
|The preliminary set-up of the CAP||
· Total GGY of the whole gambling industry is set according to the target proportion compared to GDP expected in the National Master Plan for Responsible Gambling
· The CAP of each business is set up according to the proportion of GGY to the total gambling industry in the previous year.
|The preliminary modification of the CAP||· Based on the prevalence rate of problem gambling as 30%, the excess or deficiency rate of each business will be converted into permilles (1/1000), which will be added or deducted.|
|The secondary modification of the CAP||· The level of each business will be determined by results from the soundness evaluation of the gambling industry, which will be applied to the CAP via addition or deduction.|
|The third modification of the CAP||· A business that exceeds its CAP in the previous year will reduce its CAP by 100% of the excess portion.|
Sales CAP by gambling businesses in 2016
If a gambling business exceeds its sales CAP, its sales CAP in the next year will be reduced by 100%; and it will not have the exemption benefit for the levy regarding gambling addiction prevention and treatment the following year. Based on the goal by year, the sales CAP of each business is shown below.
(hundred million won, %)
|Gambling Business||CAP in 2016|
* GGY : Gross Gambling Yield
* Exchange rate (KR￦/US$)
: US$ 1= KR￦ 1,131.46won (Based on the market average exchange rate in 2015 established by the Bank of Korea)
Preparation of the way to introduce the electronic players’ system” in the 1st National Master Plan (2008)
Based on Article 16 in the National Gambling Control Commission Act, the Commission planned to introduce the electronic players’ card system (November 2008).
How to introduce the system
Objects: Horse-, bicycle- & motorboat-racing, casino (Kangwon Land), and Sports Toto
- Prevention of cash betting and duplicated betting to prohibit excessive betting
- Card without one’s real name to protect privacy
- Card with a function to prevent gambling addiction
- Differentiated purchase limit between on-courses and off-course premises in horse-, bicycle- & motorboat-racing
Schedule: Introduction and implementation of the electronic players’ card system from 2011
In order to establish detailed ways to implement the system, the electronic players’ card system introduction preparation team was composed; and varied meetings with the relevant authorities, related institutions, and experts have been called in order to gauge concerned parties' opinions. (January 2009)
According to the results of those meetings, low-risk gamblers were excluded from the target; the original plan was modified so that the system would be fully implemented following the pilot operation by each business (August 2009).
Pilot Operation of the Electronic Players’ Card System (2010~2014)
Based on the plan for the electronic players’ card system, a detailed action plan was prepared in January 2010. Card readers were installed on some of the gambling premises, encouraging those who had the cards to make use of the newly activated system in placing their bets.
Because the issuing and usage of the electronic players’ cards were optional, the number of card users was very few, which led users to suffer certain inconveniences.
Based on the results of the pilot operation, an improved plan has been prepared through several meetings among relevant authorities, related institutions, and experts in January 2012. A new pilot operation was also put into practice in July 2012 and is still in progress.
Enlarged plan for implementation of the electronic players’ card system following the 2nd National Master Plan (2014)
In the 2nd National Master Plan for Responsible Gambling established in February 2014, an enlarged plan for implementation of the electronic players’ card system was prepared. The core of this plan was to build an implementation basis by the end of 2016 for the purpose of the full implementation of the system in 2018.
Based on the National Master plan, the ‘TFT for Promotion of the Electronic Players’ Card System’ was formed. The TFT investigates the current means of enforcing the system and looks for solutions to problems with the system. Moreover, the TFT will set up a plan for enlarged implementation of the system according to the analysis of monitoring results and example cases.
In the future, the plan is expected to contribute to minimizing the social side effects of the gambling industry and developing a sound leisure industry on the basis of small betting when the continuous improvement plan is prepared and the system is fully implemented.
Types of illegal gambling industries
|Illegal Online Gambling||Online Live Casino||· Games to bet on while watching real-time video including Baccarat, Black Jack, Roulette, and others|
|Web Board Games||· Online board games including Poker, Hwatu, Chess, Janggi, and others|
|Online Reel Game||· Internet reel games such as Ocean Story|
|Illegal Casino||· To operate a private casino with facilities accommodating betting games in studios, apartments, board cafes, and others|
|Illegal Horse-, Bicycle-&Motorboat-racing||· Activities in which spectators bet on gambling premises; or make Illegal wagers in closed spaces or via illegal websites|
|Illegal Sports Toto||· To pay prize money according to the relevant betting rate to winners who've bet on the results of sporting events|
|Illegal Lotto||· Lottery tickets sold by unauthorized parties|
|Illegal Bullfight||· Bullfight tickets sold by those outside the legal bullfight industry; and bullfights conducted wherein actual money is paid to winners|
|Speculative Game Products||· To falsify legalized gambling; and to operate transformed reel games such as Ocean Story and Golden Castle|
Introduction of the Surveillance & Report Center of Illegal Gambling
In May 2012, the National Gambling Control Commission prepared a legal basis for the establishment of the Surveillance & Report Center of Illegal Gambling according to the modification of the National Gambling Control Commission Act. The system of surveillance and reporting on illegal gambling was built when the quota of field investigators recruited for the project was filled in April 2013.
Since November 2013, the Center has been carrying out its role, including the establishment and modification of policies regarding investigations of illegal gambling, the receiving of reports and website monitoring, an inquiry into the illegal gambling field, surveillance, and police investigation requests.
Nine types of Illegal gambling reported are as follows: illegal casinos, illegal horse-, bicycle- & motorboat-racing, illegal Sports Toto, illegal lotteries, illegal bullfight, speculative game products, and illegal internet gambling.
Evaluation of the soundness of the gambling industry
The evaluation of the soundness of the gambling industry is enforced under Articles 5 and 16 of the National Gambling Control Commission Act and the 1st National Master Plan for Responsible Gambling, established in 2008. The evaluation system has aimed to assess the effort of each gambling business to enhance the soundness of the gambling business as a whole and to minimize its social side effects. This has led each gambling business to emphasize the bright side of the gambling industry as a healthy leisure activity and apply it to the actual business administration.
In order to assess each gambling business, the Commission established a plan to evaluate the soundness of the gambling industry, which was decided at a general meeting of the Commission. In addition, an evaluation committee was composed to confirm the evaluation guide and examine the evaluation results. The first evaluation was made in 2010. The results of the actual soundness evaluation begun in 2011 have been applied to the sales CAP and the levy.
Core Index of Evaluation of the soundness (2013)
|Assessment Field||Criteria||Detailed Criteria|
|The degree to which
a given business
|1.Rate of allowing the CAP||· Rate of allowing the sales CAP|
|2.Performance of extended implementation of the electronic players’ card system||· Plan for extended implementation of the electronic players’ card system and performance of the system|
|3.Sales structure and performance of improving operation system of off-course premises||· Performance of improving sales structure
· Performance of improving operation system
|4.Performance of sound purchase||· Performance of sound purchase
· Performance of inducing sound purchases
|5.Performance of decreasing problem gamblers||· Performance of decreasing problem gamblers
· Performance of effort to decrease problem gamblers
|6.Performance of decreasing problem gamblers||· Vision, strategy, and performance to aim soundness
· Internal policy and performance of system improvement regarding soundness
|The degree to which
a business has
|7.Performance of building complex culture cultural space||· Performance of building complex cultural space|
|8.Performance and satisfaction with operating soundness program||· Performance of operating programs regarding responsible gambling
· Customer satisfaction
|9.Performance of setting up a form of traditional game culture||· Performance of setting up a form of traditional game culture|
|10.Budget ratio and performance regarding soundness||· Budget ratio and performance regarding soundness|
|The degree to which
a business has
|11.Soundness education performance for employees||· Soundness education performance for employees
· Relevancy of educational contents
|12.Performance and satisfaction of gambling addiction prevention education for gamblers||· Performance and satisfaction of gambling addiction prevention education for gamblers|
|13.Performance of promoting soundness||· Performance of promoting soundness|
|The degree to which
a business has
managed field and
|14.Performance of recommended and described items||· Performance of recommended and described items resulted from field investigation|
|15.System establishment of premises management and soundness performance||· Establishment performance of managing system premises
· Performance of online betting soundness
|16.System establishment of surveillance of illegal gambling and regulation performance||· System establishment of surveillance of illegal gambling and regulation performance|
Evaluation of the soundness of the gambling industry
Advertising in the gambling industry is released by every gambling business under the name of advertising campaigns geared towards the public. However, advertising needs to be controlled because of its profound influence on how information is delivered. Individual Acts such as the National Gambling Control Commission Act and the Tourism Promotion Act have prohibition regulations regarding advertising to encourage excessive speculation. Furthermore, the Korean Racing Authority Act and the Bicycle and Motorboat Racing Act insist that advertisers warn prospective gamblers that their activities could result in harmful personal and socially harmful effects. All media, including broadcasting, prohibit speculative advertising because the media are not allowed to release information or contents regarding the encouragement of speculation. But the criteria for deciding what constitutes speculation were founded just after the launching of the National Gambling Control Commission.
Based on Article 2, Section 2 of the National Gambling Control Commission, the Commission composes and operates the Gambling Industry Advertising Review Board (GIARB), where gambling businesses and external experts participate. The GIARB reviewed advertisements from four gambling businesses, including the Korea Racing Authority, Korea Sports Promotion Foundation, Busan Spo1 Corporation, and Changwon Cycle Racing Corporation. It is composed of eight experts from various gambling companies, external institutions, and the National Gambling Control Commission. Moreover, GIARB founds the regulations for reviewing advertising based on opinions gathered from gambling businesses, and reviews each advertisement according to their criteria.
Targets to be reviewed includes all kinds of advertisements created by gambling businesses in order to expose their services to the public, and advertised products that have not been reviewed are not allowed to be released. However, the following advertisements are not included among the targets to be reviewed by GIARB: those approved by the Lottery Commission based on Article 7, Section 2 of the Lottery Tickets and Lottery Fund Act, those released by casinos reserved for foreigners, those announced on the gambling premises, and those released via online websites.
The criteria of the GIARB are as follows: 1) whether advertisements by gambling businesses encourage speculation, 2) whether they hinder ethicality or publicness, and 3) whether they are contradictory to the Acts relevant to the gambling industry and the guidelines set by the National Gambling Control Commission. Furthermore, in order to assure the soundness of gambling advertisements and establish whether or not they are ethical, the Board declares that which is not allowed to be advertised, what has to be marked, and how these criteria are to be indicated.
Indication of the restrictions and the warning signs
· Contents directly related to a relevant gambling business, including game schedules and types of betting
(Only the details of games and tour guides are allowed.)
· Notification regarding game contents for betting
· Information about premises including location of premises and facilities; and information on use procedures and methods
· Expressions that indirectly and directly lead people to participate in gambling by visiting premises and through related websites and giveaways
· Inappropriate expressions that stimulate one’s monetary expectations such as ‘jackpot,’ ‘high rate of dividends,’ ‘quick bundle,’, and ‘manyfold’ (manifold?)
· Others regarding unethical or antisocial expressions
· The following are not allowed:
· Direct and indirect expression of gambling industry or speculative actions, including scenes of the inside of casinos, varied betting features of each gambling industry, the moment of purchasing tickets, etc.
· mages that remind one of the high rate of wins or dividends, including graphic images
· Images suggesting monetary benefits such as money or a lucky handbag
· Other excessively sensational or provocative images
|Attachment of||· Public campaign advertising (including general campaign) and advertising subtitles of sponsorship
(In case of general campaign advertising, its content must be made public)
|warning signs||· "Excessive speculative activities can result in personal trauma and family breakup due to gambling addiction”
(All printed advertisements must include these warning signs)
* Indicating all advertising beyond media advertising (including radio advertising)
** Indicating all video advertising through television broadcasting, satellite broadcasting, IPTV, DMB, movie theaters, and the Internet. (Except advertising on outdoor electronic displays)
Overview of gambling addiction prevention and treatment services
The National Gambling Control Commission has been providing gambling addiction prevention and treatment services via the Addiction Prevention & Treatment Center since 2007. The National sed by the gambling industry and illegal gamblingGambling Control Commission Act was amended in 2012, which established a legal basis to create a levy for addiction prevention and treatment. This led to the founding of the Korea Center on Gambling Problems (KCGP) in August, 2013 in order for the commission to operate and efficiently manage the levy, and also promote relevant services. Moreover, the Center has prepared various services to provide effective ways to protect gamblers from gambling addiction.
Imposition and Collection of the Levy for Gambling Addiction Prevention & Treatment
Purpose: Operation of the Center to prevent and treat gambling addiction and problems caused by the gambling industry and illegal gambling
Legal basis: Article 14, Section 2 of the National Gambling Control Commission Act (amended on May 23rd, 2012)
The National Gambling Control Commission could impose and collect the levy for gambling addiction prevention and treatment from gambling businesses below the range of 5 to 1000 of their annual sales in order to protect gamblers from gambling addiction and operate the Korea Center on Gambling Problems.
The levy is operated beyond the revenue and expenditure budget; requirements regarding methods and procedures of its imposition and collection will be determined by a Presidential decree.
Main agent of levy imposition and collection: National Gambling Control Commission
- According to Article 14, Section 2, Clause 6 of the National Gambling Control Commission Act, the Commission is able to consign imposition, collection, management, and operation of the levy to the KCGP.
Korea Center on Gambling Problems (KCGP)
Purpose of establishment: to carry out its mission of gambling addiction prevention and treatment services regarding the gambling industry or illegal gambling
Main functions are listed below:
1) Program development and supply regarding counseling, education, and promotion of prevention and treatment
2) Research analysis and evaluation
3) Fostering professional staff for prevention and treatment
4) Cooperation with medical institutions
5) Service support of prevention, treatment, and rehabilitation of problem gamblers
6) International exchange and cooperation regarding prevention and treatment
Operation hours: 24/7
Targets: those who need any aid related to gambling
About: psychological problems and personal problems regarding gambling addiction