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Online gambling proves hard to defeat

Betting is getting easy, but law enforcement is stymied by delays

Jan 04,2019
Officials from the National Gambling Control Commission monitor a YouTube stream on Nov. 20, hoping to capture evidence of illegal gambling. [SHIN IN-SEOP]
Yeom, a 38-year-old businessman, was glued to an Indonesian league football game on his phone.

Yeom’s face broke out into a smile as he watched the team he bet on score a winning goal in the last two minutes of the game. In just a blink of an eye, the 86 won ($0.08) he bet on became 76,373 won.

“I usually bet on professional foreign soccer leagues. When I was gambling on the third-division French football league games, I was betting on five to six games per day,” said Yeom. “There were times when I would lose 2 million won, but there were other times when I would win my money back. I was glued to my phone all day to find out the results of the games.”

An increasing number of Koreans like Yeom are gambling on illegal sites. Unlike legal gambling, there are no limitations on the bets gamblers can place. They can win or lose a lot in just one go, which is why it’s hard for gamblers to step away from the temptation of a quick win.

Gambling apps have made losing one’s life savings as easy as playing a mobile video game.

Despite the government’s consistent attempts to crack down on these illegal gambling sites, their number has increased. According to the National Gambling Control Commission (NGCC), as of 2015, Korea’s illegal gambling market was worth 83.8 trillion won.

The illegal gambling market in 2015 was four times larger than the legal gambling market was worth in 2017, which was 21.7 trillion won. Over half of that 83.8 trillion won is made through online gambling sites. The success of online gambling is largely due to numerous obstacles that prevent investigators from quickly taking down sites.

Normally, members of the National Gambling Control Commission check for illegal online gambling sites and request that Korea Communications Standards Commission (KCSC) shut the sites down once they are found.

The problem is that it takes the KCSC four weeks to process a request. In this time, the site in question can collect as much money as they can before switching to a different IP address.

“[It takes the KCSC four weeks to shut sites down because] they wait for other things to do before dealing with them themselves,” said an official from the NGCC. “In addition, the deliberation itself takes time. [Even if a shutdown is confirmed], investigators have to wait for the request to then be processed by the internet service provider.”

To make matters worse, neither the NGCC nor the KCSC has the technology to shut down online gambling sites that use an hypertext transfer protocol secure (https) web protocol, which is a widely-used encryption method. Online gambling sites can make their operators a substantial amount of money that overshadows the relatively short prison sentences they usually receive.

The relatively lenient sentencing of gambling site operators is largely due to the difficulty in finding evidence against them. A judge needs clear evidence that proves that the perpetrator is responsible for the management of the site. Without this evidence, it’s difficult to sentence the owners. It does not help that the suspects who are caught are usually at the bottom on the operation.

Illegal gambling sites have programmers who are in charge of constructing and managing the site through foreign servers, and others in the organizations have access to fake bank deposits and burner phones. Currently, organized crime rings in Korea can fund these sites and have the organizational power to administer collective changes and orders. This is why the prosecutors believe that many illegal gambling sites can be traced back to these organized crime rings.

The collective nature of organized crimes has made crackdowns on illegal online gambling sites harder, as it makes it easier for mobsters to hide their tracks.

According to a police officer from the National Police Agency’s Cyber Bureau, when a member is caught, mobsters work as a group to quickly hide any evidence that may guide the police towards them.

Despite criminals’ high level of organization, the law enforcement that goes after them are separated into different branches. The authority to investigate operators of gambling sites belongs to the Supreme Prosecutors’ Office, while the Financial Service Commission has the authority to freeze the bank account used by the operator. In other words, the NGCC has to wait for an authorized agreement from the Supreme Prosecutors’ Office and the Financial Service Commission before requesting to shut down the site. This process takes a lot of time, which the operators use to destroy evidence against them.

Some suggest that linking affiliated investigation organizations together to make investigations move faster could be a solution. Other also advocate increasing penalties that ensure that the money gambling site operators make does not return to them.

For example, in April, the Seoul Central District Prosecutors’ Office charged gang members who ran an illegal gambling site with tax evasion.

A tax evasion conviction means that the gang members will spend at least five years in prison, while the charge also gives prosecutors the authority to look into the profits generated through the sites.

A regulatory approach from the government is also being advocated.

Currently, the government only has the authority to supervise legal gambling methods like gambling at the Kangwon Land casino, sports gambling, betting on horse races and lottery tickets.

“The government is not even trying to regulate the endless number of illegal gambling sites while each administration sets different agendas on how to continue with the legal gambling business,” said a member of the NGCC.

Considering the current situation, some experts argue that is better for the government to legalize certain gambling sites, opening the possibility for a more thorough supervision of the betting funds.

“Like Britain, it is time for the [Korean] government to give license to operators from online gambling sites in return for the operators paying taxes on the profit made through the betting transactions,” said the NGCC member.

BY KANG HONG-JUN, KIM NA-YOON AND JEONG JU-WON [jeong.juwon@joongang.co.kr]


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