NHN faces gambling game suspension
By Yoon Sung-won
NHN Entertainment’s Hangame Poker
NHN Entertainment, one of the largest online game companies in Korea, is clashing with the Game Rating and Administration Committee (GRAC), which has threatened to cancel the rating classification of the company’s web card games such as poker.
If a cancellation takes places, the game company is expected to suffer from service suspension and financial loss because web card games are its major income sources at about 40 percent.
The company protested the government move.
“The company and the game rating committee had a disagreement on the legal interpretation to determine whether our service is illegal or not,” said an NHN Entertainment spokeswoman. “We will actively defend and explain our opinion to seek an agreement.”
GRAC, an affiliated organization of the Ministry of Culture, Sports and Tourism, said on Nov. 6 that it had reclassified ratings of NHN Entertainment’s 10 web card games including “7 Poker,” “Las Vegas Poker” and “Gostop” as “scheduled to be cancelled.”
GRAC claimed that games’ system allows users to bet more than 30,000 won ($27.36) per game, which is the legal upper limit set for online gambling games. The company, however, said “the system was not illegal.”
The committee will open a session to discuss whether it will finalize the cancellation on Nov. 20 after a grace period.
The company can modify the game content to meet the regulation during this period to avoid cancellation and suspension of game services.
Once GRAC cancels the rating classification of a game title, the operator of the game service is required to suspend it.
The committee said the cancellation is currently “scheduled” not “determined” and added it will receive objections and explanations during the grace period and decided whether to finalize the cancellation or to maintain the existing ratings.
NHN Entertainment said it has already modified its game to follow the newly introduced web card game regulations earlier on Feb. 24 and was told that the ratings would be kept.
However, GRAC reversed its previous decision and argued that some aspect of NHN Entertainment’s gambling games are still not in line with the regulation, requesting it again to rectify the games. The company did not follow the committee’s second request and the latter asked the city government of Seongnam, in which the company is headquartered, to issue a warning.
NHN Entertainment requested the Suwon District Court on June 30 to suspend the execution of the warning and asked it to determine whether the game system was illegal or not.
“We will rectify any problem that the court says is illegal. But what matters here is that GRAC has threatened to cancel the rating classification despite the court not issuing a legal determination yet,” the NHN Entertainment spokeswoman added.
A source from the local online game industry expressed concern that the disagreement between NHN Entertainment and GRAC may be worst-ever example of a government regulation slowing down the local game industry.
“Growth of the nation’s online game industry is slowing down while many Chinese companies have started to penetrate the local market,” the source said. “The cancellation will worsen the situation, forcing many other Korean operators of web card games to shut down their services.”