The government appointed National Gaming Control Commission (NGCC) is expected to make its recommendations soon and it could spell disastrous news for the racing industry in Korea. The NGCC was formed in 2007 to oversee the gaming industry in Korea with its mission supposedly being to protect the Korean public from gambling.
In August, the NGCC’s recommendations persuaded the government to double tax on casino operators to 20%. This instantly caused the stock of “Kangwon Land”, the only casino in Korea open to Korean citizens, to drop 15% – the maximum daily limit. Bloomberg quoted Kangwon Land’s rivals “Paradise Casinos” as describing the move as being “just like they are telling us to shut down shop”. Next in the NGCC’s sights is horse racing.
The primary proposal of the NGCC is to limit the annual revenue of the Korean gambling industry to a total of $12.4Billion. This would include the most prominent gambling methods of horse racing, lotteries and casinos and also cycle racing and motor boat racing which both have vibrant betting markets in Korea. Under the proposal, the Korea Racing Authority (KRA) would be given a revenue quota and would face stiff penalties if it was exceeded. Given that upwards of $30Million can be wagered on a good day at Seoul Race Park and Seoul, Busan and Jeju combined currently have upwards of 200 race meetings each year, the implications for racing are obvious.
Other proposals put forward by the commission are the introduction of an ID card for gamblers to track individuals’ spending on gaming, a ban on off-course betting, a reduction in races and a total ban on simul-casting. Although the commission is yet to rule specifically on racing, industry insiders are nervous with some pointing to the make-up of the commission as being especially hostile to racing. The NGCC has fifteen members, ten of whom represent civil groups with five more being government officials. Not only does racing have to worry about the unpredictability of those representing the civil groups who traditionally take a very hard line against any form of gambling, but also a majority of the govenment appointed members come from the Minstry of Culture, Tourism and Sport, who run the casinos. With the KRA operated by the Ministry of Food, Agriculture and Fisheries, few voices are likely to speak up for racing.
Over the past few weeks, the KRA has been taking signatures from racegoers at all three of its tracks in support of the racing industry. However, given that the casinos had representation on the NGCC and still suffered, the outlook for racing is not good. In a country where racing, despite the well-intentioned efforts of the KRA, has never managed to shake off its reputation as having a negative effect on society, there is a great danger that it could fall victim to equally well-intentioned, but gravely misguided, government intervention.