Gambling addiction rates rise as illegal betting market booms

Inside a Hold em bar in Suwon, Gyeonggi-do [SON SUNG-BAE, JOONGANG PHOTO]

Mr. Park, a 27-year-old office worker, became addicted to gambling eight years ago at Gangwon Land, a state-run casino in Jeongseon, Gangwon Province.

For four years, he had been gambling at a Texas Hold’em bar near Ingye-dong, Suwon, Gyeonggi Province.

This area has one of the highest concentrations of poker bars in South Korea.

Park said a large number of Texas hold’em bars in Suwon have become illegal gambling establishments, with some operating around the clock. Why go to faraway Gangwon Province when I can gamble in my town?

So far, he has lost 500 million won ($380,213) due to his gambling habit.

The paradigm of domestic gambling is changing, with the focus rapidly shifting from legal gambling regulated by the state to illegal gambling outside government regulation.

Despite the surge in gambling addiction, sales at legal casinos and gambling establishments are ironically declining. Gamblers turn to illegal gambling.

The National Gambling Control Commission estimates that 2.37 million adults in South Korea are addicted to gambling. The addiction rate is 5.5%, almost four times higher than in Sweden.

The number of patients seeking treatment for gambling addiction has more than doubled, from 1,119 in 2017 to 2,312 last year.

A total of 2,403 people were treated for gambling addiction in the first eight months of this year, more than the number in the 12 months last year.

Gambling addiction is more severe than drug addiction.

The number of drug offenses last year reached a record 18,365. If we take into account the estimated number of undetected drug crimes, this number rises to approximately 520,000.

Even if we assume that all of these drug offenders are addicted to drugs, the total is still less than a quarter of the number of people addicted to gambling.

Authorities attribute the rapid rise in gambling addiction to the explosive expansion of the illegal gambling market.

The National Gambling Control Commission estimates that illegal gambling sales grew from 70 trillion won in 2016 to 102 trillion won last year.

In contrast, legal gambling sales are declining. Kangwon Lands’ annual sales fell 30% from 2016 to last year, from 1.6 trillion won to 1.2 trillion won. Betting on horse and bicycle races has also fallen significantly.

Lee Ki-hun, a financial analyst at Hana Financial Investment, said Kangwon Land’s potential growth faces continued downward pressure as the illegal gambling market expands. Gamblers find Gangwon Land less attractive as they can now gamble anytime and anywhere.

Online illegal gambling sites [SCREEN CAPTURE]

Online illegal gambling sites [SCREEN CAPTURE]

Illegal gambling is booming both online and offline, but the focus is more on the former.

According to statistics from the National Gambling Prohibition Committee, 99% of illegal gambling cases detected last year were caused by online gambling. Online gambling also accounts for 71% of the cases treated by problem gambling institutions in South Korea.

Yun Woo-suk, a professor at the Department of Police Management at Keimyung University, said online gambling sites are everywhere because they can be easily created by copying and pasting and changing some small rules.

One high school junior said he used to manage and recruit new gamblers among his classmates and fellow Bachelorettes. “A friend of mine who once had the same job as me had just started his own gambling business,” he said.

There is also a sizable offline illegal market, which is growing as illegal gambling dens begin to disguise themselves as generic poker bars and board game cafes in popular nightlife areas.

Mr. Zhang, 35, has been running a clean, legal Texas Hold’em bar in Suwon since 2019. “I keep losing my customers because they are looking for so-called “cash bars” that allow them to gamble illegally, Zhang said.

Several factors contribute to the growth of the illegal gambling market.

Professor Seo Won-seok from Kyung Hee University’s School of Hotel and Tourism Management said Covid-19 has not only shrunk the legal offline gambling business but also had a balloon effect on the gambling industry.

In addition, legal gambling could lead to similar forms of illegal gambling, said Kim Kyo-ho, head of Citizens Against Drug Addiction.

The prolonged economic stagnation has spread a get-rich-quick sentiment across the country. Jang An-sik, a professor of sociology at Korea University, said this may have affected people’s gambling mentality.

Gangsters are at the center of a rapidly growing illegal gambling market.

Ulsan police arrested 13 gangsters from 13 organized crime groups operating 46 illegal gambling establishments with deposits worth 10 trillion won. They are accused of operating 46 illegal gambling websites, with offices in the United States and Cambodia, and making more than 100 billion won in profits from the 30,000 gamblers they recruited.

Police in Nambu Province, Gyeonggi Province, are investigating two gangs accused of operating illegal gambling dens disguised as Texas hold’em bars.

The poker bar sign lights up in Suwon, Gyeonggi Province. The poker bar occupies three of the building's eight floors. The banner said the bar was offering free beer and drinks and free teaching on the rules of Texas Hold'em. However, after entering the game, players must pay at least 50,000 won to receive 10 chips to play the game. [SON SUNG-BAE, JOONGANG PHOTO]

The poker bar sign lights up in Suwon, Gyeonggi Province. The poker bar occupies three of the building’s eight floors. The banner said the bar was offering free beer and drinks and free teaching on the rules of Texas Hold’em. However, after entering the game, players must pay at least 50,000 won to receive 10 chips to play the game. [SON SUNG-BAE, JOONGANG PHOTO]

A gang member who runs an illegal Texas Hold’em poker bar in Paju said that the Paju area in Gyeonggi Province where Texas Hold’em bars are concentrated is very hot and is called the Macau of South Korea.

Kim Jin-wook, a board member of the Korea Problem Gambling Agency, said illegal gambling has become a key area of ​​focus for criminals because it can make large amounts of money with little risk.

However, the authorities’ ability to detect and investigate illegal gambling has not kept pace with the explosive growth of the market.

In 2020, more than 5,400 online gambling cases were uncovered. Last year, that number dropped to 2,838.

A police official said unless there was a whistleblower, it would be difficult to trace or identify those orchestrating illegal gambling schemes because most websites relied on foreign servers and frequently changed domain names.

Even after operators are caught, they often resume business after changing domains as if nothing happened.

Lim Chang-young, head of the violent crime investigation team of the Gyeonggi Namnam Province Police Department, said Texas hold’em bars are major illegal offline gambling markets and are difficult to bust because they pretend to be legitimate businesses registered as ordinary restaurants.

According to the Ministry of Food and Drug Safety, about 99% of the approximately 1,200 Texas hold’em bars across the country are registered as regular restaurants.

Kim Sun-wook, a member of the National Gambling Control Commission, said lax penalties for illegal gambling crimes have exacerbated the problem. Offenders are usually fined or given a suspended sentence.

A man in his 40s surnamed Yin was arrested after stealing industrial drugs from company stocks and selling them to fund gambling. He did this many times.

He could not overcome his addiction to illegal Toto betting. Whenever he arrived at Shiheung for work, he was eager to analyze the players’ performance instead of starting work, and he kept running to the toilet to check the game results.

Addicted people say the final destination is a game called baccarat, where betting decisions and results can be made quickly. The fast cycle makes people more excited and addictive.

According to police statistics, baccarat accounts for more than 10% of illegal gambling. In 2018, this proportion was only 5%.

In a worrying trend, the threshold for illegal gambling has been significantly lowered. Today, minors are using mobile phones to gamble.

According to a survey by the Ministry of Gender Equality and Family, more than three percent of first-year junior high and high school students nationwide are considered to be at risk of illegal gambling.

A 14-year-old middle school student in Seoul said that at least three or four of the 25 students in our class regularly engage in illegal gambling.

Hybrid forms of gambling blur legal lines and incorporate different types of assets, including stocks, making gambling more difficult to control.

Mr. Lee has spent all his wealth through baccarat casino games and Gangwon Land Casino gambling since he was 20 years old. He started an investment business in cryptocurrency and futures markets. [SON SUNG-BAE, JOONGANG PHOTO]

Mr. Lee has spent all his wealth through baccarat casino games and Gangwon Land Casino gambling since he was 20 years old. He started an investment business in cryptocurrency and futures markets. [SON SUNG-BAE, JOONGANG PHOTO]

Lee once worked in a construction company and became obsessed with gambling after his first exposure to gambling at Gangwon Land in 2010.

Lee said that if you make 2.7 million won a month and see 5 million won disappear in the blink of an eye in baccarat, it’s hard to be satisfied with your normal salary.

Lee then dabbled in illegal online gambling and explored the world of the stock market and cryptocurrency. Whenever I win or lose a large amount of money, I get a hit of dopamine. After going through all these ups and downs, I now believe that all gambling is gambling.

Public gambling authorities offer extensive treatment, noting that day trading in cryptocurrency and stock markets may be a means of gambling.

Ha Ju-won, a psychiatrist who specializes in addiction treatment, said: “Stock investing and cryptocurrency trading can be risky if people see them as a means to get rich overnight.” It carries a higher risk because People are confused that what they are doing is investing, not gambling.

Author: Kim Min-jung, Son Sung-bae, Shin Hye-yeon, Lee Soo-jung [lee.soojung1@joongang.co.kr]


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