Two former officials from the Ministry of Culture and Tourism are being questioned by prosecutors over allegations that they accepted bribes from a company issuing state licensed gambling vouchers. The Ministry’s Cultural Bureau has been accused of being directly related to licensing companies that issue gift vouchers used for illegal gambling payouts from being converted to cash and the sale of video gaming machines. The gambling scandal involving members of the Korean government was first reported in August.

In a country where only one resort casino is open for Koreans to gamble and all the other casinos are foreigners-only, the popular gaming arcades were supposed to limit winning payouts to gift vouchers. In practice it was widely accepted that the vouchers were exchanged for cash. An estimated US$9.1 billion in tax revenue was being lost annually and organised crime is thought to be behind much of Korea’s illegal gambling activity. Under the law, the ‘cultural’ gift certificates are only to be used for the purchase of books, recorded music and tickets for the performing arts and films.

The Korean Government has now decided to ban the gift certificates from next April. Some local stores are already refusing to accept them on the grounds that they may not get reimbursed, causing discontent amongst customers. In September the chief executives from two companies that manufactured and distributed the attractive ‘Pada Iyagi’ (Sea Story) gaming machines were indicted. Over 45,000 units had been sold and it is believed they were illegally programmed to allow higher jackpot winnings than permitted under the law.

The issuance of gift certificates, allowed since 2002, has been blamed for the proliferation of adult gaming arcades and facilitating the growth of the illegal gambling sector. Since starting the investigation, prosecutors have arrested several public officials and businessmen and have imposed overseas travel bans on more than 100 people. (E-12.05.06)

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