South Korea's prime minister apologized Tuesday for allowing video gambling arcades to spread in a country where gaming is mostly illegal.

The apology comes after a public outcry demanding the government curb gambling.

Last week, Prime Minister Han Myeong-sook ordered the closure of thousands of video game parlors suspected of illegal gambling and prosecutors began an investigation.

"I would like to offer my sincere apologies for the serious damage to the livelihood of low-income earners by the nationwide spread of speculative gaming," Han said before a cabinet meeting Tuesday.

She added the government might not have effectively managed its regulatory responsibility in granting licenses to arcade operators.

Prosecutors said they are investigating video arcade operators featuring a game called "Sea Story" on suspicion it was an illegal video slot machine.

Prosecutors are also investigating whether arcade operators might have bribed public officials to approve licenses.

Arcades featuring "Sea Story", a video slot machine game with nautical themes, are suspected of trying to skirt South Korean laws by raising the payouts from their machines beyond legal limits, prosecutors said.

After several arcade operators allegedly altered payouts, the game grew in South Korea. Arcades featuring the game have mushroomed around the country since starting two years ago.
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All a player has to do is insert cash and watch sharks, whales and other sea creatures spin and stop on the video screen.

Reports of the video game scandal have dominated South Korea's media coverage over the past two weeks, in part because of the size of the industry and possibility of corruption.

"Who made this country into a republic of gambling?" the mainstream JoongAng Ilbo daily asked in an editorial last week.

Out of the country's 17 legal casinos, only one allows South Korean nationals to gamble.

Arcades devoted to "Sea Story" had yearly sales of more than US$15 billion, local media reported, and many of their customers come from lower income brackets.

The government allows arcades to give out gift certificates that can be exchanged for merchandise for people who play video slot and poker machines. Kiosks can also exchange the gift certificates for cash, after taking about a 10 percent commission.

(China Daily August 30, 2006)