Providing for Profit Without Casino License is Illegal
"Illegal Seed Rights Recognized as Tangible Assets with Property Value"
The government established the 'Guidelines for Prohibiting Casino-like Activities' on the 10th to eradicate illegal Hold'em pubs. Hold'em pubs are places that charge an entrance fee, provide gaming venues and chips, and sell alcoholic beverages.
According to the revised 'Tourism Promotion Act' enacted last February, non-casino operators are prohibited from offering table games such as roulette, blackjack, dice, poker, baccarat, electronic table games, and slot machines for profit. Providing financial benefits to specific individuals or causing losses to users is considered a casino-like activity and punishable by up to seven years in prison or a fine of up to 70 million won.
The Ministry of Culture, Sports and Tourism, the Gambling Industry Integrated Supervision Commission under the Prime Minister, and the National Police Agency jointly created the guidelines to encourage the legal operation of Hold'em pubs and enhance the effectiveness of crackdowns on illegal businesses. The content mainly covers two areas: the establishment requirements for casino-like activities and reference points for the legal operation of Hold'em pubs.
According to the guidelines, if currency exchange activities occur related to games provided at Hold'em pubs, operators will be punished for violating the 'Tourism Promotion Act.' Providing cash, goods, or cryptocurrency to game participants; exchanging chips, seed rights (entry rights to major Hold'em tournaments), or points earned through games for cash, goods, or cryptocurrency; and using accumulated points from games as future entrance fees for Hold'em pubs are all considered casino-like activities subject to punishment.
The guidelines also specify matters concerning the illegal provision of seed rights and the hosting of Hold'em tournaments. Providing seed rights in a form that makes it impossible to identify specific individuals is subject to punishment. This is because if the winner cannot be confirmed, seed rights may be traded for cash or other assets through secondhand markets or applications. A Ministry of Culture official explained, "It can be recognized as tangible property with financial value," adding, "Even those other than the winner can participate in major Hold'em tournaments."
Hold'em tournaments held by collecting entrance fees from participants also carry legal risks. Cases where entry fees are pooled to provide prize money or goods, or where prize money or goods are sponsored by companies, are no exception. Since entrance fees may be used as tournament operating expenses, there is sufficient ground to consider this a casino-like activity.
A government official stated, "We will focus on cracking down on illegal operations through these guidelines and encourage the sound operation of Hold'em pubs."
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