After a three-month audit, the Board of Audit and Inspection (BAI) on
Thursday forwarded to the prosecution a list of 36 people, including former
and incumbent government officials, who it said are involved in the video
arcade gambling machine scandal, often dubbed “Pada Iyagi,” or “Sea
Story”. The 36 people include six former and incumbent officials of the
Ministry of Culture and Tourism and 13 officials of the state-funded Korea
Media Rating Board (KMRB), which is under the control of the ministry.
Between Aug. 21 and Oct. 29, the BAI dispatched some 30 officials to
government agencies and video game manufacturers as well as to voucher
distributors, who illegally allowed their customers to cash in their
vouchers, called “Culture Gift Certificates.” “The ministry officials
were well aware that the video slot machines could be highly addictive and
cause serious social problems, but they neglected their duty to regulate
such illegal gambling machine parlors,” a senior BAI official said in a
press briefing. “The KMRB officials have also approved more than 3,500 reel
game machines since 1999, even though they knew that most of the games could
be illegally reprogrammed to allow higher jackpot winnings than the legal
limit of 20,000 won ($21) per game,” he added. State auditors also found
out some KMRB officials manipulated documents to expedite the application
process for some 37 video game programs in September last year.

The gambling scandal erupted in August when prosecutors indicted the chief
executives of the company that manufactured and distributed the Pada Iyagi
machine. More than 45,000 units of the country’s most popular video slot
machine were sold.

The Roh Moo-hyun administration has been criticized for allowing tens and
thousands of illegal gambling parlors, which have devastated the livelihood
of low income families, nationwide.