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Police Raid Offices of Korean eSports Association

KeSPA Logo

On Sept. 7, 2017, the authorities in South Korea conducted a raid at the premises of the Korean eSports Association (KeSPA). A former chairman of this governmental authority, Jun Byung-hun, was arrested along with three KeSPA employees, including a former aide to Jun. They are suspected of corruption-related activities stemming from an alleged payoff from retailer Lotte Homeshopping to Jun Byung-hun. KeSPA oversees eSports in Korea, and some of its duties are hosting tournaments, establishing rules for competitions, and promoting the industry among the public at large.

Supposed Bribe Paid to Influence Legislation

Jun Byung-hun
Former Head of KeSPA,
Jun Byung-hun

Besides serving as the head of KeSPA, Jun Byung-hun was a member of parliament in 2015, which is when the improprieties are suspected of occurring. He was part of the committee on broadcasting and communications. Lotte Homeshopping operates an extensive network of brick-and-mortar retail outlets, and it was trying to get a broadcast license renewed so that it could run a home shopping show. Allegations are being made that Lotte bribed Jun to get the license approved.

Also on the radar of prosecutors is a 2015 deal whereby Lotte Homeshopping paid 300 million won (about $270,000) to sponsor the KeSPA Cup, an international Starcraft II tournament. There are concerns that this transaction may have served as a vehicle for siphoning 110 million won (approximately $100,000) into the hands of Jun Byung-hun.

One of Jun Byung-hun's achievements as leader of KeSPA was in exposing and battling match-fixing rings, so it's especially ironic that's he now suspected of this kind of wrongdoing. Jun denied that he was guilty of any malfeasance. “I was never involved in any illegality in connection with the Lotte Homeshopping case reported in the press,” he said. “I'm truly dumbfounded.”

About Lotte Home Shopping

Lotte Homeshopping

While Jun Byung-hun had a relatively clean reputation prior to these allegations, the same can't be said for Lotte Homeshopping, which booked nearly 3 trillion won ($2.7 billion) in revenue last year. In May 2016, Lotte was subject to an administrative sanction whereby it had to reduce its broadcasting schedule by six hours a day for six months starting in September because the firm was found to have submitted false documents when filing its license renewal. The head of the company was sentenced to 18 months in prison in connection with this fraud. In August 2016, Lotte Vice-Chairman Lee In-won was found dead, hanging from a tree along a cycling path. Prosecutors had been investigating him for possible financial misdeeds, and rumor had it that he committed suicide to avoid public disgrace.

Impact on the Korean eGaming Scene

Stylized Video Game Controller

While none of the suspected crimes directly involve eSports matches, the fact that such a high-profile former leader of KeSPA has come under suspicion threatens the perceived integrity of the organization. This governing body for professional gaming in South Korea has already been criticized for monopolistic practices and for engaging in many disputes with its business partners. There have been match-fixing incidents in the past, such as the 2010 scandal that involved legendary “StarCraft: Brood War” player Ma “sAviOr” Jae-yoon. This latest investigation has the potential to tarnish the image of KeSPA and by extension the eSports industry in South Korea as a whole. There are a number of sportsbooks where one can bet on eSports, read about them here.