[Exclusive] "Converting Game Points to Cash" Promotes Gambling... Overseas Operators in Regulatory Blind Spot

107 Illegal Advertisements Detected Over 5 Years
Punishment Difficult for Foreign Address Businesses
500 Million Won Fine for Non-Compliance
Domestic Businesses Complain of Reverse Discrimination
Game License Revocation and Overseas Cooperation Needed

[Asia Economy Reporter Jang Sehee]#Kim Heechul (16, pseudonym) downloaded a game after seeing an advertisement on his mobile phone claiming that ‘game points can be converted into cash.’ However, when he actually played the game, cash conversion was impossible. It was false advertising. Lee Kiho (17, pseudonym) downloaded a puzzle game, but deleted it immediately after sexually suggestive ads unrelated to the game appeared.

Amid the rampant spread of gambling-promoting and sexually suggestive advertisements harmful to youth on the internet, most operators are overseas businesses, raising concerns about the limits of management and supervision.

According to data submitted by the Game Rating and Administration Committee to Kim Seungsoo, a member of the National Assembly’s Culture, Sports and Tourism Committee from the People Power Party, there were a total of 107 illegal game advertisements in the past five years. All of these were overseas operators. From January to May this year, 11 illegal game advertisements were detected, all from overseas operators: 8 from Hong Kong, 1 from Singapore, 1 from Switzerland, and 1 from Europe.

All 100+ Cases Are 'Overseas Operators'... Sexually Suggestive Content Detected Only If False Advertising

An official from the Game Rating and Administration Committee said, "Since overseas operators have addresses abroad, there is no local jurisdiction, making it difficult to impose fines." He added, "Although the acts are committed by overseas operators, regulations are strictly applied only domestically, so only domestic operators must comply." The committee’s only recourse is to contact advertising service providers and request deletion as much as possible.

The gaming industry says, "Since the controversy over sexually suggestive ads for the Chinese game ‘The One Who Becomes King’ in 2018, regulations have been strengthened, resulting in reverse discrimination where only domestic companies are punished." According to the Game Industry Promotion Act, if game content information is misrepresented or gambling-promoting content is posted, corrective recommendations such as deletion or blocking of advertisements must be made. If these measures are not implemented, a fine of 5 million won is imposed.

Even if the content is sexually suggestive, detection is impossible unless it is ‘false advertising.’ Gambling promotion can be punished simply for distributing such content, but sexually suggestive content is not included in the law.

[Image source=Yonhap News]

Assemblyman Kim said, "There is no effective way to sanction overseas game companies, so even if illegal advertisements are blocked through corrective recommendations, similar ads reappear." He added, "For maliciously repeated illegal advertisements, the game rating license should be revoked, and a system should be established to request investigations and actions abroad, among other practical measures."

The government has also decided to restrict game advertisements harmful to youth. Kim Hyunsook, Minister of Gender Equality and Family, said, "With the increase in youth digital media use due to the spread of COVID-19, concerns about exposure to and damage from various harmful environments mediated through this have intensified." She added, "We will implement countermeasures in cooperation with related ministries."

This content was produced with the assistance of AI translation services.