Minister of Culture and Tourism Kim Myung-gon Friday said that the
government will ban video game arcades from using gift certificates for
payouts in April next year as part of the efforts to eradicate illegal
gambling. Kim also apologized to the public in a press briefing, accepting
criticism after the Board of Audit and Inspection of Korea on Thursday held
the government accountable for the recent video gambling game scandal over
“Pada Iyagi” or Sea Story. “As the main government body responsible for
the gaming industry, I apologize to the public for causing such a big
controversy with addictive games,” Kim said. “I feel totally responsible
for the audit result and as head of the ministry, I will try to improve the
gaming licensing system,” he said. The nation’s video arcades and slot
machine parlors have been unlawfully allowing their customers to cash their
vouchers, which is considered the main culprit behind the quick spread of
illegal gambling. Kim said that the government is also planning to come up
with stricter licensing regulations for companies. The ministry first
allowed game arcades to use gift certificates as payouts in 2002. The
vouchers, dubbed “culture gift certificates,” were supposed to be used to
purchase items such as books, music, and tickets for movies and the theater,
but instead were exchanged for cash. The ministry has been hit hard by the
gambling scandal, which involves ministry officials who were lobbied by
businessmen for licenses to sell the game machines or issue the vouchers.
The recent gambling scandal first erupted in August when prosecutors
indicted the chief executives of the two companies that manufactured and
distributed “Pada Iyagi,” video slot machines. The audit board on Thursday
sent a list of 36 people, including former high-ranking ministry officials
to the prosecutor’s office for criminal investigation.

With most gaming rooms unlawfully trading the vouchers for cash to lure more
customers, the country’s video slot machine business grew beyond recognition
with the number of adult-only game arcades outnumbering 24-hour convenience
stores by 20,000 to 9,500.

Most of the gaming machines were illegally reprogrammed to allow higher
payouts than the legal limit of 20,000 won. Pada Iyagi was the country’s
most popular slot machine game by far with more than 45,000 units sold.