Mob Linked to Video Gambling, Prizes

Adult game arcades and distribution of gift certificates were discovered to be dominated by crime organizations, which used the profit to fund illegal activities.

The market for adult only game arcades and commercial computer rooms reaches 88 trillion won annually, with tax evasion rates estimated to be 8.8 trillion won.

The National Intelligence Service (NIS) submitted a report on July 11 to Cheong Wa Dae on “Addressing Social Evils - Dismantlement of Commercial Game Arcades Urgently Required.”

According to the report, Ahn, a middle boss from the Yeonggwang crime family in South Jeolla Province, is in charge of national distribution of H Gift Certificates, the third largest producer of certificates, while Seobang crime family deputy boss Oh is operating two illegal casinos which generate daily profits averaging 100 to 500 million won.

The report stated, “Tax evasion rates from illegal money exchange are estimated to amount to 4.5 trillion won for adult-only arcades, and 4.3 trillion for commercial computer rooms.”

The report also estimated the annual market size of adult game arcades to be 50 trillion won, 36 trillion won for commercial computer rooms, and 2.0 trillion won for illegal casinos, amounting to a total of 88 trillion won, and pointed out that with the debilitating influence of game facilities plans should be devised to counteract these social evils.

Adult game arcades numbered 11,000 facilities in 2003, but with an annual increase of over 15 percent the report estimated a total of 20,000 for the present, including unregistered facilities.

The report also stated, “One casino bar operator at Samseong-dong, Gangnam-gu, Seoul boasted that, “We don’t have to worry about the crackdowns,” hinting at ties with the regional police, and pointed to specific links between civil servants and operators.

The report added, “In Gangnam (Seoul), Goyang and Euiwang (Gyeonggi Province), 500 restaurants employ dealers and have installed illegal casinos while operating on a membership basis.”