Koreans will spend more than 3 trillion won on lottery tickets this year, according to forecasts from the Strategy and Finance Ministry, representing an all-time high as more people try their luck with numbers in desperate times. / Yonhap

By Kim Tong-hyung

After enduring a dismal year for their wallets and financial futures, Koreans could be picking the wrong time to test their chances with Lady Luck.

Consumers here are blowing an astronomical amount of money on lotteries and gambling, a damning government report showed, as more people roll the dice in desperation with their living standards squeezed dramatically by stagnant wages, record debt and soaring inflation.

According to the Strategy and Finance Ministry, Koreans have spent more than 2.79 trillion won (about $2.46 billion) on lottery tickets from January to November this year.

When combining lottery sales with betting in racing arenas, casinos and on sports lotteries, consumer spending on games was measured at over 12.7 trillion won through in first three quarters of this year, accounting for more than 1 percent of the money the economy could generate in an entire year.

In his recent study, Jeon Jong-seol, a professor of Ewha Woman’s University, projected that the social costs from gambling addiction will be comparable to 10 percent of the gross domestic product (GDP) by 2050 unless the country finds effective steps to defuse its gaming problem.

``The low birth rate and the aging of the population, which are leading to a decline in the country’s working population, suggests that gambling will grow as a bigger social headache here in comparison to other problems,’’ said Jeon Jong-seol, a professor of Ewha Womans’ University’s society and welfare department.

``The society will be feeling a stronger strain from gambling and there is a need for a government-level effort to curb this problem. Each regional government should work to offer better solutions for preventing gambling addiction and rehab.’’

Government officials expect lottery sales to rise to 3.1 trillion won by the end of December, comfortably passing the 2.84 trillion won ceiling the National Gaming Control Commission (NGCC) has recommended for this year.

The NGCC, a unit under the Prime Minister’s Office, has urged the Finance Ministry to take a harder look on the danger imposed by the inexorable rise in the spending on gambling. Its suggestions include imposing a hard cap on the sales of the Lotte national lottery for the rest of the year or even an outright suspension.

But Finance Ministry officials balk at the idea, saying that such clampdowns could hurt the business of the country’s 18,000 shop owners selling Lotto tickets, not to mention provoking public egos in a pre-election year. Besides, it’s hard to deny that increasing lottery sales help soak state coffers at a time of fiscal constraint.

``The worries that the rising sales of lottery tickets are fueling the growth of the country’s gambling problems could be justified. However, it’s unrealistic to think that the government could find ways to forcibly suppress the sales of the tickets,’’ said a Finance Ministry official.

The bets on on national lotteries, sports lotteries, racing (horse, cycling) and other gaming was at 17.3 trillion won last year, or about 1.5 percent or the country 1.17 quadrillion won in gross national income, the finance ministry said. This represented more than a triple from 6.27 trillion won in 2000.

Betting on horse racing generated nearly 44 percent of the consumer spending on gambling last year, while lotteries (14.6 percent), cycling (14.1 percent), casinos (13 percent), and sports lotteries (10.8 percent) were the other popular gaming items.

This doesn’t count the money injected to illegal gambling, which has founded new life on the Internet, and the amount local spent on casinos in Macao and other overseas locations.

More than 221,000 Koreans visited foreign casinos last year, mostly in Macao and the Philippines, according to the country’s travel authorities. Currently, Kangwon Land in Jeongseon, Gangwon Province, is the only domestic casino where locals are allowed to play.

Based on Jeon’s analysis, the social costs of gambling, measured by its affects on employment, finances, health, welfare and crime, have reached around 78 trillion won last year, or more than 7 percent of an entire year’s GDP. This proportion could be touching 10 percent by 2050, according to his study.

``In simple terms, the nation has spent 73,000 won on gaming for every 1 million won it earned,’’ Jeon said.

The increase revenue generated by gaming proves that gambling is a business that thrives in murky economic times. Decaying family finances are an alarming development for the country, which has already seen a sharp pullback in consumer spending that threatens to put the brakes on economic growth.

Households have amassed 892.5 trillion won of outstanding debt in mortgages, on credit cards and in other loans as of September, after increasing what they owe by 16.2 trillion won in the third quarter alone, according to Bank of Korea (BOK) numbers.

When combining borrowing from self-employed businesses and non-profit organizations as well as non-interest paying debt, the consumer debt measurement has long exceeded one quadrillion won.

While the average family’s ratio of debt to disposable income is speeding toward 160 percent, consumers here are apparently finding enough money to spend on gaming.