Board of Audit and Inspection: "Foreigners' Horse Racing Betting Refund Rates Unreasonably High"

Board of Audit and Inspection Announces Results of Regular Audit on Korea Racing Authority... Utilizing Customer Satisfaction Surveys After Recruiting Loyal Customers

[Asia Economy Reporter Ryu Jeong-min] The Board of Audit and Inspection revealed that foreigners receive an unreasonably higher payout rate than locals due to horse racing betting conditions favorable to foreigners.

On the afternoon of the 30th, the Board of Audit and Inspection announced the results of a regular audit on the Korea Racing Authority's horse racing business. This on-site audit was conducted over 24 days from June 3 to July 24 last year.

According to the Board of Audit and Inspection, the Korea Racing Authority has been operating a foreigner-only off-track betting center since June 2016 for the purpose of earning foreign currency. Dedicated sales staff (3 to 4 per membership office) are assigned to the foreigner off-track betting centers. The betting limit applied to locals (KRW 100,000 per race per person) is not applied to foreigners.

[Image source=Yonhap News]

Since the payout to winning bettors is determined through mutual competition, the payout rate should not be unfairly affected by differences in purchase conditions and environments between locals and foreigners. It is known to be advantageous to purchase as late as possible and to spread out purchases.

The Board of Audit and Inspection explained, "Due to differences in purchase environments between locals and foreigners (such as dedicated staff assignment and non-application of limits), foreigners purchase more than locals, with an average purchase per person per race of 3 tickets for locals and 18.2 tickets for foreigners, and within the last 5 minutes before closing, 1 ticket per minute for locals and 15.4 tickets per minute for foreigners."

The Board of Audit and Inspection stated, "In 2019, the payout rate for locals (off-track betting centers) was 72.4%, whereas the payout rate for foreigners (off-track betting centers) reached 121.6%, indicating an unreasonably high payout rate for foreigners." They added, "The Korea Racing Authority president was notified to prepare improvement measures to ensure that differences in betting conditions and environments between locals and foreigners do not unfairly affect payout rates."

Meanwhile, the Board of Audit and Inspection also pointed out fairness issues in the Korea Racing Authority's Public Institution Customer Satisfaction Index (PCSI) survey.

The Board of Audit and Inspection reported, "(The Korea Racing Authority) educated branch office staff on how to respond to the survey, including pre-arranging friendly customers," and "obtained the survey schedule in advance from the survey company, shared it with each branch, and collected and shared CCTV photos of surveyors captured by the branches."

The Board of Audit and Inspection criticized, "Each branch pre-arranged friendly customers and on the survey day directly guided surveyors to these friendly customers to ensure their participation," and "headquarters PCSI survey staff mobilized employees' family and acquaintances to respond to the PCSI survey."

The Board of Audit and Inspection concluded, "As a result, the Korea Racing Authority unjustly received an S grade in all PCSI surveys from 2016 to 2018, undermining the fairness of the survey," and demanded that the Korea Racing Authority president take disciplinary action against those involved and implement measures to prevent recurrence.

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