A history of South Korea's tough anti-gambling laws and why devs are looking to crack overseas markets

A history of South Korea's tough anti-gambling laws and why devs are looking to crack overseas markets

Social casino is one of the most profitable sectors in the worldwide mobile gaming market, but it's one that can be hamstrung by legal red tape.

This is very much the case in South Korea, where anti-gambling laws - particularly in respect to slot-based games - mean that social casino services are heavily restricted in the local market.

Curiously, though, this hasn't stopped the development of social casino games for the worldwide market continuing to take place within South Korea - and occasionally to considerable success.

One such example of this is Crenova, a subsidiary of Korean giant Netmarble, which has launched its flagship title ALL4CASINO for a global - primarily US - audience.

To learn more about the historical and legal reasons for the existing restrictions in South Korea and targeting non-domestic markets, reached out to Crenova Business Department Director Byung Hyuk Kim. What is the nature of the law restricting social casino games in South Korea and how long has it been in place?

Byung Hyuk Kim: Pre-censorship for cultural content in Korea was maintained for a long time as a method of staying in power for military dictatorship.

Strong regulations were applied not only on games, but also on overall content of culture including literature, music, movies and broadcasting until the 1980s.

The new medium of video games became a target of pre-censorship when introduced in the late 1970s and early 1980s. These legal regulations were relaxed as Korea became democratised in the 1990s.

However, all game content still has to go through pre-censorship before release, except for self-censored content from the Apple App Store and Google Play for all-age users.

There are three main things that come under consideration: violence, sexuality and gambling.

South Korea is very strict on slot and roulette games - even the mini games in Mario Party.
Byung Hyuk Kim

A game becomes 19+ so that underage players are not allowed to play the game if it contains a high degree of violence, sexuality or gambling features, and it becomes prohibited for sales if it is beyond the legal limit.

South Korea is very strict on gambling and generous on violence compared to other countries. For Grand Theft Auto, for example, Korean players over 19 years old could easily access to the game while many other countries restricted access due to its violence.

However, Korea is very strict on slot and roulette games - there is even a case that Mario Party, which men and women of all ages enjoy, could not pass the deliberation only because of slot machines included in the mini-games.

There are two main reasons that Korea became strict on gambling.

Firstly, necessity for strong limitations arose as numerous political affairs were caused by the owners of gambling arcade centres and casinos as they lobbied to politicians, and huge corruption that political influencers were involved in was revealed in 1993.

Secondly, most Korean people - including those who are in charge of national policy - have a tendency to think that more people will suffer from gambling addiction if regulations for online gambling are relaxed.

Actually, there are frequent news articles talking about people who run through all their money from racecourses run by a public enterprise, the Korean Horse affairs Association, and from ‘Kangwon Land Casino’, the only casino that allows domestic people in Korea.

Korean social casino games mainly consist of Go-Stop using Korean local rules and Poker. National regulations partly allow these kinds of card games.

It is very hard to provide social casino services in Korea since there are strong restrictions on slots-style machines that have ‘reels’ such as American-style slot machines, Japanese Pachinko, Pachi-Slots, Korean Video Slots and Video Poker.

Due to these reasons, DoubleU Casino, a global top-tier social casino developer, does not provide services in Korea - where its headquarters is located.

DoubleU Casino, developed in South Korea

The limitation on the amount of money spent is the main method of regulating. The best example is that the regulation limits $500 per monthly purchase limit for each person.

Personal allowance to spend money at one time should not exceed one-tenth of the monthly purchase limit, $50.

Legal restrictions make slot games much more difficult to launch in South Korea as it directly impacts profitability.
Byung Hyuk Kim

The game should be developed with a self-controlling system that blocks a player from any other gambling games from a specific company, if their spending exceeds one-tenth of their monthly purchase limit within 24 hours.

This requires a personal identification system and yearly renewal for continuous identification checks.

Moreover, a self-control function on spend limit and access limitation in case of exceedance should be essentially included in the system to prevent over-immersion.

Auto-betting is not allowed, users are not allowed to invite their friends into the game in PvP games such as Poker and Go-Stop for fraud prevention and the system should automatically match the random players.

Even stronger limitations are applied to slots. Currency purchased in-game cannot be used for betting in slot games - only secondary money earned from other games such as Poker and Go-Stop.

This restriction makes slot game services much more difficult to launch in the Korean market as it directly impacts profitability.

Tell us a little about the history of social casino game development in South Korea.

If American social casino took up a huge slice of the pie in the gaming industry from Facebook games, it was online game portals for Korean social casino - and they are still at the centre now.

The history of the Korean social casino market was started when Hangame Go-Stop became a hit in 1999.

Hangame was then merged with Naver, the number one search portal site in Korea, and became NHN (Naver-Hangame Network).

The Korean social casino market enjoyed its renaissance with some of the largest online game portals in Korea such as Neowiz and Netmarble providing services for Go-Stop and Poker.

Neowiz's Seastar Free Slots & Casino

In 2006, the average daily users of the top three companies - Netmarble, P.Mang and Hangame - were around 4.1 million, and the number of users that played Go-Stop and Poker was around 1.2 million.

However, many companies began to target the overseas market, as the social casino growth rate in Korean market was slowed down with the enactment of strong restrictions on online gambling.

Hangame, which provided a Pachinko game on Japanese online game portals that became the number one title in the Japanese market, is a good example of successful overseas expansion.

Korean services for Facebook games are completely blocked due to legal restrictions.
Byung Hyuk Kim

Korean companies started to jump into the social casino market as Facebook Canvas games began to take up a huge slice of the revenue pie in the gaming industry.

Recently, the number of social casino studios only targeting the overseas market started to increase, as Korean services for Facebook games are completely blocked due to the matter of legal restrictions.

As the mobile market expanded with the widespread adoption of smartphones, more Korean companies entered into the mobile social casino market to pre-occupy the overseas market that shows a drastic upward growth curve, while the Korean market is still showing stunted growth under restrictions.

Golden Sands Casino by NHN and Seastar Casino by Neowiz are all in this movement.

While severe competition is going on overseas, the revenue for Korean social casino games is showing a slow upward trend, as Anipang Go-Stop (through the KakaoTalk platform) joins the mobile competition of Netmarble, Hangame and Neowiz.

When did the idea of Netmarble moving into the space arise and when was Netmarble-Crenova established?

Crenova was established in May 2009 for the mobile business.

In 2014, Crenova and Hydako - a famous physical slot machine manufacturer - mutually signed an exclusive contract for a mobile and online IP license in South Korea.

Netmarble made an investment in Crenova and it became a subsidiary of Netmarble since Netmarble saw growth potential in the social casino industry in 2015.

Why was it decided that the team should remain in Korea rather than setting up an overseas studio where social casino is legal?

South Korea has a supportive environment for stable game development and there are a lot of developers with high capabilities.

In addition, Korea is a homeland of high-tech mobile device manufacturers such as Samsung and LG. Crenova benefits from getting the fastest update on the newest technology and its information.

We believed that we could still catch the global trend regardless of studio location, using the example of DoubleU Casino’s Korean development studio - which still gained success in the global market.

What are the biggest challenges you face as social casino developers in South Korea, and how do you overcome them?

Overcoming different tastes of the East and the West is the biggest challenge Crenova is facing.

We are trying to satisfy the tastes of our main target market - US players - by recruiting American staff.
Byung Hyuk Kim

Since most of our developers are Korean, we are trying to satisfy the tastes of our main target market - US players - by recruiting American staff or those who have lived in the States.

All our graphic works are in control of the art director who has numerous experiences working in American companies such as Disney.

The probability math for slot games is one of the biggest factors in which users from the East and the West show a gap.  

The Eastern users enjoy slots that have penchant for gambling with higher payout and with high volatility, but we are also developing slots with low volatility that US social casino users can enjoy with advice from our Western slots mathematician.

We are spending a lot of time studying and researching on American culture such as seasonal events and issues in order to provide American-fitted (better) game and offers to the users.

As you're catering to a global audience, localisation is obviously important. What's your approach to this?

In terms of localisation, we are quite confident for Asian market, since we have comparative advantage in product competitiveness with the Hydako IP that is already popular among Asian casinos.

In addition, we are trying not only to overcome the language barrier with American staff, but also trying to contain what US users really want in the game.

We are striving hard not be left behind by attending the global game shows, forums and lectures as well as conducting research on competitors’ games in depth.

What are your key target markets for ALL4CASINO, and how are you hoping it can establish itself as a leader in the genre?

The core target for ALL4CASINO is middle-aged women from 40 to 60 in the US.

The US market is undisputably the number one market for the social casino genre, especially in Slots, and possesses the largest share in the world.

We are trying our best to appeal to those core targets, middle-aged women.

Crenova's ALL4CASINO

Additionally, ALL4CASINO is expanding its targeting and trying to broaden its market position by sub-targeting men and women of all ages who want real casino experiences as ALL4CASINO’s main slot contents are directly ported to mobile from physical slot machine.

The biggest strength of ALL4CASINO is that the contents from real land-based casino are directly ported to mobile.

Therefore the game is designed in an upright view in order to imitate the current trend of video slot machines.

Fancy graphics with interactive composition of upper and lower screens are strengths of ALL4CASINO that you cannot enjoy in other social casino apps.

Is your team granted any special legal permissions that make working in the sector easier?

Crenova has not received any special legal permission for the Korean business since we are not providing any services to the Korean market at the moment.

We anticipate that we can provide marketable slots services to the Korean market as we are fully informed of Korean laws.
Byung Hyuk Kim

However, we anticipate that we can provide marketable slots services to the Korean market as we are fully informed of Korean laws and restrictions on social casino, and are conducting a research on a Korean service in depth.

Can social casino-style games based around virtual currencies circumvent the Korean legal restrictions and has anyone found success doing this?

Social casino game using virtual money is not prohibited in Korea.

Regulations on Korean social casino consist of limitations on amount of real money and virtual money spending in games, and services are allowed as long as these regulations are kept.

Netmarble, HanGame and Neowiz have succeeded in the online business with Go-Stop and Poker which apply Korean local rules, but these huge successes brought growth stagnation as online social casino regulations were created after the success.

No American-style social casino developing studios have been succeeded in Korea yet due to its stronger regulations in slots.

There are only two slots style games - P.Mang Vegas by Neowiz Playstudio and Slot Social Casino by Locojoy - ranked between 7th and 10th in the casino category on the Korean Google Play store.

Can you see Korea's legal position on social casino games changing anytime soon, and would you encourage it?

I believe it is a matter of time on relaxing regulations and policies on games and gambling.

Legal relaxation is inevitable in ‘The Promotion Act on Game Industry’ in many ways, since it over-restricts on people’s private lives. We should reconsider the range of gambling acceptability.

In my personal opinion, legal restrictions on online gambling are predicted to be relaxed because there are policy makers who believe in:

  • Preventing over-spending, without prohibiting gambling itself.
  • Excluding access of the youth.
  • Modifying the system to a more effective way.

These are the only ways to realise personal freedom and social justice.

You can download ALL4CASINO for free on the App Store and Google Play.

Features Editor

Matt is really bad at playing games, but hopefully a little better at writing about them. He's Features Editor for, and has also written for lesser publications such as IGN, VICE, and Paste Magazine.


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