In August 2006 a gambling scandal involving members of the South Korean government was caused when incidents of bribery came to light. An investigation led to several arrests of public officials and businessmen as well as the imposition of a travel ban on over 100 people. The Supreme Prosecutors’ Office seized thousands of computers from video gambling arcades, declaring the slot machine style gaming illegal, and closed down most operations.

Prosecutors have now instigated raids against some foreigners-only casinos in Korea. Only one resort casino is open to Korean gamblers but there are sixteen that cater to foreign gamblers. All the casinos are operated by Grand Korea Leisure (GKL), a subsidiary of the state’s Korea Tourism Organisation (KTO). Under the government’s plans to expand gambling tourism, three new Seven Luck casinos opened recently, two in Seoul and one in Busan.

Financial documents and computer files have now been seized from the two Seven Luck casinos in Seoul, the GKL office raided and the GKL Chairman’s home searched. The moves against GKL came after a request by the Board of Audit and Inspection for an investigation into alleged breach of trust or embezzlement in the gambling venue selection process.

ON 15 April 2002 four hotel firms - the Lotte Hotel, the Grand Hilton Hotel, Hanmoo Convention Co and the Ritz Carlton - submitted a petition to the South Korean Ministry of Culture and Tourism calling for new business licenses allowing them to operate casinos for foreigners only. The petition said the casino business for foreigners only had been monopolized by one company - Paradise Industry - for the past 34 years. In 2004 the government agreed to award the three new licences.

Hamnoo Convention Corp was selected by KTO for a casino at Oakwood in Seoul even though the company was not qualified to set up gambling facilities. Prosecutors are now deciding whether a fair and legal selection process was undertaken or whether illegal lobbying was involved. It has been alleged that Hanmoo was chosen despite receiving lower marks than other bidders. The possible embezzlement of funds by GKL or KTO officials is also being investigated. (E-05.27.08)

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