North Korea’s illegal online gambling earns regime close to a billion dollars

north-korea-online-gamblingNorth Korea earns close to one billion dollars per year from illicit internet activity, primarily via illegal online gambling businesses.

Yoo Dong-ryol, head of the Korea Institute of Liberal Democracy and a former senior researcher at the Korean National Police University, made the claim at the South Korean military’s annual security conference in Seoul on Thursday.

Yoo said North Korea operates “tens of hubs in China and Southeast Asia” aimed at generating sorely needed foreign currency to prop up the isolated regime. Collectively, Yoo estimated these hubs earn around KRW 1t (US $864m) by “developing and selling illegal gambling programs, operating gambling sites using names of foreign nationals and stealing cyber money through hacking.”

Korea JoongAng Daily quoted Yoo saying illegal gambling software programs are sold for tens of millions of won, with further lucrative charges for upgrades. Yoo said the North hires local residents in other Asian countries to run the gambling sites, with the profits split “six to four or half-and-half.”

The conference also heard from an intelligence official who claimed the North Korean gambling software was “embedded with malicious code” that was used to hijack computers for mass cyber attacks. Yoo said the North had recently added 800 hackers, bringing the regime’s total hacking force to 6,800 individuals.

Last October, South Korea’s National Intelligence Service estimated there were a total of 1,100 North Korean agents running online gambling sites that directly targeted South Korean bettors. Other agents were reportedly targeting online role-playing gamers by selling prized in-game virtual items.

During the 2014 FIFA World Cup, Cambodian authorities arrested 15 North Korean nationals for running an illegal online football betting operation out of a rented villa in Phnom Penh. In addition to the standard cache of computers and betting records, the authorities seized a hefty $8.6m in wagering funds.