South Korean Supreme Court Rules Virtual Currency-Only Sportsbooks are Gambling Platforms

The South Korean Supreme Court has ruled that online virtual currency-only sportsbooks must be classified as gambling platforms in a landmark verdict.

The South Korean media outlet E Daily reported that the court has overturned a previous High Court verdict, noting that the game at the center of the case, Score888, used virtual coins that could be traded for fiat currencies.

The Supreme Court stated: “Sports prediction games that use convertible in-game coins constitute gambling.”

The court also ruled that the game’s currency should be recognized as a form of property. It added that the “uncertainty of sports game results should be considered a matter of chance.”

Legal experts said the ruling would set a precedent for courts when “determining whether gambling has occurred.”

Virtual Currency-Only Case Tried at Three Levels

The case in question concerns an unnamed defendant who spent some 15.4 million won ($11,000) on an online sports betting platform. He placed the bets over six months from May 23, 2021, to November 26, 2021.

The court heard that the man bought the in-game currency via an online exchange. He then used this currency to place bets on the results of pro soccer, basketball, baseball, and volleyball games.

The defendant received virtual currency payouts if he won. He then exchanged the coins for cash via the same exchange. Prosecution officials explained that he made deposits on the platform via 62 separate transactions.

The man was first tried by a branch of the Seoul District Court. This court found him guilty of online gambling offenses.

The presiding judge handed him a 1 million won ($720) fine. The judge stated that the fact that the man had used online exchanges to change money showed a “clear intent to gamble.”

However, the defendant appealed the decision, arguing that he believed he was using a legitimate website. The High Court overturned the district court’s decision, finding the man not guilty. The judge said that it was “difficult to view the site” as a gambling platform “beyond a reasonable doubt.”

But the Prosecution Service appealed the High Court verdict. The Supreme Court backed the district court’s verdict. It also reinstated the fine.

Landmark Verdict for Sports Betting Sites

The Supreme Court claimed that the High Court had “misunderstood the legal principles of gambling.”

The court went on to define gambling as “the act of risking money” and participating in games of chance that involve the gain or loss of money.

The judge stated that “chance,” in this instance, refers to “the outcome of events that the parties involved could not clearly foresee or freely control.”

The Supreme Court highlighted the fact that the convertibility of game tokens to fiat currencies like the KRW was “a key criterion” for courts determining whether virtual currencies constitute property.

The judge ruled: “If a token can be converted into cash, rather than simply used as virtual currency within the game’s platform, it should be considered a form of property.”

Earlier this month, South Korean police released data showing a 24-fold rise in gambling-related juvenile crime cases over the three years from 2021 to 2024.