[In-Depth Look] How to Reduce the Blind Spots of Highly Addictive Sports Betting Games

Baek Juseon, Attorney at Law, Yungpyeong Law Firm

Games released in Korea must, in principle, receive a rating classification from the Game Rating and Administration Committee before they can be serviced to the public. Among these games are web board games that mimic traditional gambling games such as Go-Stop and poker. However, these web board games are subject to stricter user protection obligations to prevent gambling addiction compared to other games. Sports betting games, which are similar to Sports Toto in format?where players predict game outcomes and receive game money based on the results?have also been explicitly included in the revised Game Industry Promotion Act Enforcement Decree as of last March, leading to a surge in their service offerings.

According to data on the review and results of sports betting games submitted by the Game Rating and Administration Committee to Lee Byung-hoon, a member of the National Assembly’s Culture, Sports and Tourism Committee, a total of 51 sports betting games had received rating classifications by July, with 26 currently in operation. Recently, several major game companies such as NHN, Mgame, and Neptune have announced plans to launch sports betting games within this year.

The issue lies in the fact that although sports betting games are subject to the same regulations as web board games under the revised enforcement decree, the standards have not yet been firmly established, leaving a regulatory blind spot. According to the enforcement decree, game providers offering card games that simulate betting or odds?such as Hwatu (Korean flower cards) or sports outcome prediction games?via information and communication networks must establish user protection and gambling addiction prevention measures in consultation with the Game Rating and Administration Committee. Following the strong regulations imposed on web board games after the 2005 "Bada Story" incident, various measures to protect users and prevent gambling addiction have been implemented, and efforts have been made to minimize the negative effects of regulation, such as industry contraction and revenue decline, through self-regulation. In 2016, the enforcement decree introduced obligations for web board game providers to establish user protection measures, and accordingly, the Game User Protection Center was established under the Game Culture Foundation and has been actively operating.

Meanwhile, web board game companies have been subject to legal regulations such as monthly purchase limits on game money and restrictions on game usage when game money loss limits are exceeded. They have also voluntarily operated illegal currency exchange reporting centers, implemented warning systems to prevent game overindulgence, established self-restriction and third-party restriction on game use, and designated user protection officers within their companies?measures not explicitly required by law?to reduce problems. This year, the enforcement decree mandated that user protection and gambling prevention plans be established in consultation with the Game Rating and Administration Committee, and a private certification system was introduced within the Game User Protection Center to evaluate and certify the implementation of these plans. Although not yet sufficient, steady progress is being made to reduce regulatory blind spots.

However, no such self-regulation standards have been established for sports betting games, which are inherently more prone to gambling addiction, nor are there any visible efforts to develop such standards. Sports betting games are essentially games intended for gambling. The games on which bets can be placed are diverse, and players can set various options not only on win or loss but also on the course of the game. Additionally, the use of cash items to increase payout rates is possible, making the elements that attract users much more varied. This intensifies the gambling nature of the games and increases the likelihood of users becoming overly immersed.

Similar to web board games, cases of illegal currency exchange through illegal exchangers continue to be reported. If the Ministry of Culture, Sports and Tourism and the Game Rating and Administration Committee decide to apply the same regulations to sports betting games as to web board games, they must establish strict standards. It is urgent to promptly organize standards to prevent users of sports betting games from suffering damages due to illegal currency exchange and overindulgence, and to address issues arising from the gambling nature of sports betting games.

Baek Ju-seon, Attorney at Law, Yungpyeong Law Firm