SOUTH KOREA Law and Practice Contributed by: Hyun Ho Eun, Jung-Chull Lee and Dukjoong Na, Kim & Chang
apply and change of control triggers would include assets or revenues standards. 10.3 Passive Investor Requirements There are no passive investor requirements regard- ing acquisitions or changes of control of gaming and gambling companies.
• failure to register important licence changes; • violation of the obligations of gaming business operators under the GIPA (eg, receive education on distribution; do not have, or let others engage in, gambling or other speculative acts using gam- ing products; do not promote speculation through operating methods, devices or equipment; and do not permit minor use at minor-game-providing businesses); and • the distribution of unlawful speculative games. 11.3 Financial Penalties Most of the financial penalties under the relevant laws and regulations, including the GIPA and the Criminal Code, are determined within statutory limits, taking into account the seriousness of the violation and num- ber of violations. On the other hand, administrative fines may be imposed in the case of violation of spe- cific laws such as the Monopoly Regulation and Fair Trade Law (FTL), the FLAA or the E-Commerce Act, which are calculated based on the revenue related to the violation. The KFTC has a history of impos- ing administrative fines for unfair business practices, including false or misleading advertising.
11. Enforcement 11.1 Powers
Regulatory bodies – as mentioned in 2.1 Online Gam- bling , 3.5 Key Offences and 9.5 Sanctions/Penalties – can enforce criminal referral or a fine. 11.2 Sanctions Under the Tourism Promotion Act, casino operators may be subject to administrative orders such as sus- pension of business operations (for up to six months) or cancellation of registration for a variety of viola- tions, including, but not limited to, the following: • admission of any South Korean national into the casino; • installation or use of any casino machine in viola- tion of any relevant statute or regulation; and • violation of casino business regulations (eg, viola- tion of regulations on daily business operation hours, or engaging in any prohibited acts such as casino workers’ participation in games). Under the GIPA, a gaming business operator with a game manufacturer or publisher registration licence may be subject to business suspension (for a period of up to six months) or business closure for several violations, including: • false registration of a licence or using fraudulent means to register;
12. Tax 12.1 Tax Rate by Sector
There are no separate tax rates for gambling, and the general corporate income tax in South Korea will apply. For reference, casinos licensed under the Tourism Promotion Act are required to make payments to pro- motional funds for tourism.
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