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I-Gaming Dispute Part of a Much Bigger Picture in Korea

22 January 2004

Interactive gaming lies at the heart of a conflict between North and South Korea after the South Korean government has reprimanded one of its own software companies for engaging in a joint online gambling venture with a company from the North.

In March of 2002, South Korea's Unification Ministry-- the government body that oversees all businesses that have relationships with North Korea--granted Seoul-based Internet software developer Hoonnet Co. a license to work with a North Korean company to launch Jupae.com, which the Associated Press calls "the only North Korean Web site not devoted to churning out propaganda."

State-operated Jupae.com provides lotteries, poker, blackjack and other card games to players from all over the globe in the English, Korean, Japanese and Chinese languages. Neither North nor South Koreans are permitted by law to use the site, but over 270 South Koreans wagered around $192,300 on the site last year.

Last month the Unification Ministry charged Hoonnet with violating its license for "Internet game and software development." The Ministry consequently canceled Hoonnet's inter-Korean business license and prosecutors are now pursuing charges against 16 South Korean citizens who have allegedly gambled more than $2,560 each.

Park Won-hong, one of South Koreas lawmakers, claims that Jupae.com collects over $400,000 each month in wagers from mostly South Korean players. He warns that North Korea could become a "server base for Internet pornography and gambling."

Jupae.com, on the other hand, says it receives only about $40,000 in wagers each month, and three quarters of it is paid out in winnings.

Hoonnet's founder, Kim Beom-hoon hopes to win his license back by appealing the case in court, claiming that the ministry knew all along that he planned to develop a casino. He also questions why the government has not brought charges against South Koreans who have gambled with other international online gaming sites.

In a much larger spectrum, the situation is about more than Internet gambling. Jupae.com was part of a vision to facilitate more communication and ease between the countries. South Korean legislator Cho Woong-kyu said, "The Internet could become an effective tool to help North Korea open up and reduce misunderstandings between the two Koreas."

The Korea Times recently featured an article depicting Jupae's free online bulletin board system as one of the only means most South Koreans have of communicating with some of their Northern neighbors, although it seems that that the only North Koreans participating in the board discussions are its 10 administrators. South Koreans are prohibited by an anti-communist National Security Law from communicating with any North Koreans unless they first obtain permission from the Unification Ministry. The Internet has made enforcement of that law nearly impossible.

According to Kim Bum-hoon, "When we first proposed to North Koreans to set up an anonymous bulletin board open to non-members, the North said it was impossible. We convinced them by stressing the need to build up confidence."

He later added, "I am frustrated and sick and tired of this absurd government behavior. If they punish businessmen like me, who is going to do business with North Korea?"

A message on Jupae.com's Web site echoed the sentiment, "There will be no future for our country if trust between North and South crumbles and lies prevail," it said. "How can North Korean companies trust Unification Ministry approvals for inter-Korean joint projects and continue to conduct business?

"The Ministry cannot avoid denunciations from North and South Korea if it lies and bullies a South Korean firm engaged in a cooperative project and goes ahead with the cancellation of the license."

Internet news site www.inews24.com has launched a campaign called "Cyber One Korea" that seeks to legalize communication between citizens of the two countries via the Internet.

I-Gaming Dispute Part of a Much Bigger Picture in Korea is republished from iGamingNews.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com