Last Year Lottery Sales Reach 5.4 Trillion Won 'Record High'... Illegal Activities Like Gambling Also Surge

Assemblyman Goh Yong-jin Points Out "Insufficient Enforcement Efforts Corresponding to Sales and Promotion Expenses"

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] Last year, lottery sales reached an all-time high, but concerns have been raised about the lack of separate damage management measures for the rapidly increasing gambling activities and fraud damages.

According to data submitted by the Ministry of Economy and Finance's Lottery Commission to Go Yongjin, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, lottery sales in 2020 reached 5.4152 trillion won, marking the highest sales ever recorded. Nearly 3 trillion won have already been sold in the first half of this year, and a new record in sales is expected.

Meanwhile, in the past three years, reports of phishing scams impersonating Donghaeng Lottery and illegal private gambling sites operating by stealing lottery information have increased more than 6.5 times. The reported illegal activities include creating websites impersonating Donghaeng Lottery, the lottery trustee, to induce victims to purchase “fake Donghaeng Lottery” tickets, and phishing scams where scammers demand high “server recovery fees” or “withdrawal fees” when victims request prize payments or refunds, then cut off contact and disappear.

This year, a group was arrested for defrauding about 12 billion won by inducing people to buy lottery tickets on fake lottery websites claiming that artificial intelligence (AI) could predict winning lottery numbers in advance. There were 312 victims who fell for this scam, and simply dividing the total damage by the number of victims shows that each person suffered an average loss of about 38 million won. Initially, victims confirmed winnings of 50,000 to 100,000 won deposited, which encouraged them to invest larger amounts, resulting in losses.

The problem is that despite the continuous increase in lottery sales and the widespread illegal activities related to it, efforts to crack down on and monitor illegal acts are minimal. Over the past seven years, more than 7 billion won has been spent annually on lottery promotion and advertising, but the Ministry of Economy and Finance's Lottery Commission does not operate a separate organization necessary for preventing or remedying lottery-related illegal activities. Although illegal activities are reported through the Donghaeng Clean Center operated by the trustee, Donghaeng Lottery Co., Ltd., the budget for operating this center has averaged less than 100 million won per year over the past seven years.

The Ministry of Economy and Finance's Lottery Commission claims that, in addition to the Donghaeng Clean Center, the Gambling Industry Integrated Supervision Commission and police stations jointly crack down on lottery-related illegal activities. However, in reality, joint crackdowns are conducted only twice a year, no separate statistics on the scale of damages are managed, and no appropriate plans for damage prevention or relief are prepared.

Lottery revenue is effectively called a “tax without tax resistance” and a “tax paid more by economically vulnerable lower-income people.” The recent surge in lottery sales and lottery-related fraud damages is generally seen as reflecting the economic situation of the lower-income class, which has been hit hard by the COVID-19 pandemic.

Assemblyman Go Yongjin said, “As lottery sales break records every year and scams impersonating the lottery and illegal activities have greatly increased, the Lottery Commission should make greater efforts in damage prevention and relief.” He emphasized, “Instead of leaving monitoring of lottery-related illegal activities to the trustee and doing nothing, concrete government-level measures are needed.”

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