The purpose of this study is to identify the status of illegal gambling industry in Korea and to seek its policy measures. The study includes theories and foreign cases (Chapter 2 and Chapter 3) in relation with the gambling industry, the status of regulation and punishment against the illegal gambling and the analysis of investigation of illegal gambling conducted by the police (Chapter 4).
The study focused on the demand and the supply of the illegal gambling industry, and conducted an online survey of 2,000 people to examine the demand of gambling and its response from the government (Chapter 5). The study includes the analysis result of 7,335 court judgment (Chapter 6), as well as the analysis result of operational structure and management of illegal gambling industry by conducting a survey and an in-depth interview with persons involved in the illegal gambling industry and the organized crime rings (Chapter 7). The last part of the study includes the policy measures from the perspectives of the criminal justice, economy and sociology. The main findings are as follow:

First, the illegal gambling industry is growing faster than the legal gambling industry. In Korea, there are seven types of legal gambling industry - casino, horse racing, bicycle racing, race of rowing, lottery, sports betting, and bull fight - which require permission of the government. Korea has the most wide range of gambling options among OECD member countries. There are small deviations in the sales revenues for each type of gambling, but the overall revenues of the industry is growing particularly the sports betting. The problem is, however, the number of illegal gambling industry is growing faster than that of the legal gambling industry. The legal gambling industry amounts to around 20 trillion won while the illegal gambling industry adds up to about 127 trillion won, six times higher than the legal industry.
Second, the main culprit for the large-sized illegal gambling industry is its high demand. According to the online survey conducted on 2,000 people, 12.3% respondents have experienced the illegal gambling, which means one out of ten people have experienced the illegal gambling. It shows how the illegal gambling is deeply entrenched in our society.
Third, the other factor of the growing number of illegal gambling industry is its larger benefits than the costs. The survey and in-depth interview results show that the costs for establishing the illegal gambling website is only 10 million to 20 million won, and it has almost no risk of being arrested if fake bank passbooks or fake mobile phones are used and when the online gambling websites are operated by companies based abroad.
The illegal brick-and-mortar operator has little chance of being caught when using a figurehead and organized gangs, and manipulating the games remotely. Even if being charged, the gambling proceeds have already been hidden away that the operator could make a living after serving his/her sentence.
Fourth, the response from the investigative agency is faced with challenges compared with the rapid movement of the illegal operators. Based on the assumption by the interviews with the police, the investigation on illegal gambling requires tracing thousands of accounts by cracking down on thousands of websites so as to detect few number of users. The police has to prove the relevance between the criminal proceeds and the use of the gambling website. Most of accounts are, however, borrowed ones making it difficult to prove, and it has physical limits to trace over hundreds of borrowed accounts for a long time. It also requires the issuance of search and seizure warrant on consolidated accounts for tracing the accounts increasing fatigue in the police for investigation. As a result, there is a high chance to crackdown and investigate the illegal gambling only during the intense crackdown period or when there are prime reports from the relevant authorities.
Fifth, the illegal gambling issue could not be addressed through temporary policies such as a short-term special crackdown considering the characteristic of the gambling industry. It requires consistent crackdown and punishment. There are various countermeasure authorities, however, many of them are not effectively taking actions. In Korea, the countermeasure authorities include the National Gambling Control Commission(NGCC), permission and license issuing authorities (administrative bodies), the police, and gambling operators, all of which are separated and conducted by functions and individually. The investigative body, for instance, takes charge of judicial crackdown on illegal gambling, the administrative bodies such as the Ministry of Culture, Sports, and Tourism, and the Ministry of Agriculture, Food and Rural Affairs conduct administrative monitoring and crackdown, and the Korea Communications Commission blocks the illegal gambling websites. The gambling operators also report the illegal gambling. The countermeasure authorities share a goal of "eradicating the illegal gambling," but each authority implements their task separately rather than comprehensively.
Sixth, the illegal gambling industry attracts more number of people than the legal gambling industry due to its higher competitiveness and addictiveness than that of the legal gambling. Return rate, game method, and accessibility in legal gambling have lower competitiveness than that of the illegal gambling.

The study has proposed three types of policy measures; the key to the measures is the strict response to illegal gambling and enhanced competitiveness of the legal
gambling industry.
The policy measure from the perspective of the criminal justice system is to reinforce the crackdown on the illegal gambling and systemizing the punishment: a) establishment of Task-Force(TF) and training professional investigators for the crackdown of the illegal gambling; b) discussion on special judiciary rights-enhanced monitoring power of the NGCC; c) facilitating reporting system by ensuring protection of evidence and witnesses; d) reviewing cooperation among nations and formulating a support team for investigating foreign servers; e) reinforcing regulation in the stage of pre-gambling; f) regulating fake passbooks and mobile phones; g) regulating virtual accounts; h) crackdown and regulating offshore gambling; and h) devising policy measures on operating government policy council, etc.
The second policy measures which is based on the economic perspective is to stimulate incentives of users. It could discourage illegal gambling users by giving them financial disadvantages, and encourage legal gambling users by granting them financial advantages as well as increasing customers' satisfaction. The policy measures may include a) recovery of illegal profits; b) confiscating criminal proceeds; c) decreasing tax rate and adjusting return rate; d) adjusting ceiling of betting; e) improving the system of regulating maximum profit; and f) developing competitive customer-oriented service.
The third policy measures from the perspective of sociology proposes increasing social awareness and overcoming individuals' problems. The measures include a) improving the policy direction of the NGCC; b) expanding treatment programs for gambling addicts; c) consistent promotion and enhancing trainings; d) response to individual's characteristics; and e) raising awareness of the gambling industry.
In fact, the above-mentioned policy measures are not new: it has already been delivered in the policy authorities by numerous reports and paths in the past. The key to addressing the issue is highly dependent on the will of policy authorities and the effective implementation of the policies. We should expect to see the decreased number of illegal gambling industry which currently accounts for the majority of the underground economy through effective policy measures, and the maximized positive functions of the legal gambling industry.