Video Slot Machines Dominate South Korea

To avoid confusion during the reading of this article, the reader should be informed that the name for the South Korean base monetary unit is the ‘won’.  The ‘won’ is valued at 958.3 won to a single US dollar.

As with all countries, South Korea has its fair share of political scandals.  The current issue involves the nephew of South Korean President Roh Moo-hyun and thousands of slot machines.  Though there are many questions to be asked, the story has revealed a connection between Korea’s rapidly-growing gambling industry and major social issues within the country.

Domestically, video arcade slot machines generated 2 trillion won at the close of 2004, according to Korea Game Development & Promotion Institute.  In a little more than a year, slot machine statistics have jumped significantly.  The market grew to 4 trillion won.  At the beginning of 2005, gaming arcades only had 13,159 slot machines.  Some 1,800 slot machines later, that number is currently at 14,998.

Noticeable shifts, such as the alteration of video game gift certificate regulations and the permitting of the video arcade slot machine game ‘Sea Story’, coincided with the highest spikes in the market.  Locally, ‘Sea Story’ is known as ‘Pada Iyagi’.

Accusations have attributed the thriving gambling industry to involvement on the part of ranking officials in the prevailing Uri Party.  An influence-peddling scam has been placed on the Uri Party with the alleged intention of lifting regulations on arcade games.

Gambling spots have also increased due to the conversion of many commercial computer rooms.  Numbers at the end of July reveal 4,000 computer rooms have allowed video arcade slot machine games to be installed.

Bankruptcies and even suicides across the nation have been blamed on the spread of addictive gambling machines.  The owner of a video-arcade in Seoul said, “Since people believe that the governing power is related to this slot machine business, lots of owners of video arcade slot machines think their business will not be tackled.”

Gift certificates awarded to winning gamblers are the primary focus in the political scandal.  Over the past year, there has been a substantial increase in the number of gift certificates printed for winning gamblers.

The gift certificate prize debuted in September of 2002.  Within their first two years, the total value of printed gift certificates never exceeded 400 billion won.  But, in less that a year, from August of 2005 to June of 2006, video game arcades have already printed 23 trillion won in gift certificates.

The Korean government approved 19 varieties of gift certificates, including certificates that can claim cultural products.  In spite of all that, 98.5 percent of certificates found their way back into the pockets of the issuing companies, meaning most of them were used to claim gambling chips.

Coinciding dates give a lot of ground to conspiracy theorists.  In December of 2004, almost to the date, the Ministry of Culture and Tourism altered its regulation on gift certificates at the same time ‘Sea Story’ became commercialized by the government.  In the early days of gift certificates, money earned could be traded in for certificates at the end of the game.  New games allow players to exchange every time they collect 20,000 points.  This new system has lead to the excess of gift certificates.

Representatives from the distributors and manufacturing company of ‘Pada Iyagi’ were arrested on Sunday.  The state is currently looking into how producers of such highly addictive video arcade slot machines received government permission to distribute their products.  So far, local arcades operators have purchased an excess of 45,000 slot machines with Pada Iyagi games from the A-One company.  Each slot machine sold for 7 million won, roughly 7,300 US dollars.