South Korean Police Bust Underground Online Sports Betting Ring

On Wednesday, October 26th authorities in the South Korean city of Incheon raided the operations of a major illegal online sports betting syndicate, per a report published by the Korea JoongAng Daily.

The bust conducted by the Incheon Metropolitan Police Agency resulted in 16 managers being arrested, while 128 other individuals were booked on various charges related to illicit gambling.

Based on charging documents, the network of eight online sportsbook sites generated 3.4 trillion Korean won (KRW) – or $3 billion – in wagering activity between January of 2013 and July of 2016. A regular customer base of more than 200,000 Korean citizens used the network of websites to place sports and racing bets.

While gambling is generally considered a crime in South Korea, the government does license a pair of sports betting agencies, with Sports Toto offering pari-mutuel betting and Sports Proto focusing on fixed-odds wagers. These sites are highly regulated, however, and the maximum allowable win per pager is only KRW 100,000 – or about $87.

These restrictions prompt South Korean betting enthusiasts to seek out alternative venues through which to place wagers. The recently raided online sportsbook network allowed bettors to wager up to KRW 1 million ($876), while the minimum wagering threshold was KRW 5,000 ($4.38).

Per the Korea JoongAng Daily report, sports generating the highest volume of betting included American football, baseball, and basketball, along with international soccer.

Over the course of three and a half years, the sports betting ring earned KRW 140 billion (142 million) in profits for managers and owners. Of that amount, just KRW 1.3 billion ($1.1 million) was confiscated by Incheon police.

According to the police report, an unidentified 42-year old man and his 38-year old brother are suspected of organizing the syndicate. The younger brother was never apprehended during the raid, fleeing beforehand along with 15 other individuals.

Following the creation of a single sports betting website, and its subsequent success, the brothers arranged for their brother-in-law to join the organization. This third member created seven more “skins” of the same online sportsbook platform to maximize exposure, while taking on the role of president. This man is also on the run from authorities, and he has been declared a fugitive from the law after absconding with KRW 80 billion ($70,092,000) in illicit funds.

For the 16 managers in custody, and the 15 now on the run, the likely sentence for operating an illegal online sports betting ring will be lifetime imprisonment. In October of last year, the South Korean government announced harsh new provisions mandating that online gambling operators be charged under organized crime statutes – which carry a maximum sentence of life.

Under the new president’s guidance, the sportsbook ring ran advertisements overseas in places like the Philippines, extending prospective employees a generous monthly salary and simple duties.

According to police, who collaborated with immigration agencies in the Philippines to raid the company’s Manila offices, young people who responded to the advertisement were first directed to a training center in Bundang District, Gyeonggi-do. From there, they were sent to Manila to begin work – allegedly under duress in many cases after managers confiscated passports to prevent defections.

As many of these more than 120 employees had nothing to do with the sportsbook’s operations, they were charged and booked without detention, with deportation the most likely outcome.