Desperate scratching

Lottery sales in Korea rose 3.4 percent year-on-year in 2012, official figures showed, as more people played in the bad economic times. / Korea Times photo by Kim Ju-young

Lottery sales set record in downturn, invite new concerns

Surpassing 3.19 trillion won (about $2.95 billion), lottery ticket sales in Korea set a record last year despite a dismal economy, or perhaps because of it.

While this supported the old belief that a lottery is a recession-proof business, there are also increasing concerns about an overheating market and the social problems resulting from it, as more people are drawn to play because their financial outlook is not improving.

However, that didn’t keep the Strategy and Finance Ministry from lifting this year’s lottery sales target to 3.28 trillion won, which would represent a 3.2 percent increase from 2012. This may affect the decision by the National Gambling Control Commission (NGCC) when it sets the sales limit after March, one reason why critics are angry with the finance ministry.

Last year represented the second straight year when lottery sales breached a government-set ceiling of 2.87 trillion won.

While the finance ministry’s Lottery Commission has demanded a higher sales limit in recent years, the NGCC turned down the request, citing insufficient legal grounds for an increase.

When the NGCC-imposed ceiling is breached, the commission is usually expected to lower the maximum sales figure for the following year or impose other restraints aimed at curbing excessive gaming. Its decision to up the limit may represent desperation for more revenue because the incoming Park Geun-hye government has been promising to spend like a big government and tax like a small one.

Lottery sales reached 2.47 trillion won in 2009 but jumped to 3.8 trillion won in 2011 as personal finances worsened. Sales of online-based lotteries such as Lotto reached 2.83 trillion won last year while those of off-line lotteries such as Pension Lottery 520 stood at 346 billion won.

Managed by the Prime Minister’s Office, NGCC sets the annual sales cap for six gambling businesses, including the lottery and casinos.

Critics say the government is neglecting its duty and has no will to regulate the overheated lottery market.

The Lottery Commission has repeatedly demanded that a higher sales limit be set in recent years. It doesn’t seem to feel any need to lower the sales of lottery tickets.

“It is hard to more strictly restrict the sales of lottery tickets or stop selling them just because they sell well, because such measures will face strong opposition from customers. Lotteries hardly create addicts and a large portion of profits are spent on good causes,” an official from the commission said.

But the NGCC has turned down the requests for higher sales limits.

“There is no obvious reason to accept such a request,” an official from the NGCC said.

But the commission’s regulations are seen as nominal because violators are subject to very light penalties.

The sales for lotteries in 2011 reached 3.08 trillion won, surpassing the ceiling by 275.9 billion won, but only 539 million won in fines were imposed last year.

“The government is actively boosting and supporting the gambling business. It is encouraging people to seek one-off bonanzas,” an official from a civic group said. <The Korea Times/Kim Tae-jong>