Risk legal review when promoting overseas companies with potential violations of the Act on the Control and Punishment of Gambling. Law firm Veat

Law firm Veat received a request from domestic entity A (hereinafter referred to as "the client") involved in Web3 cryptocurrency, and reviewed the legal risks associated with entering into a partnership agreement with an overseas entity potentially violating domestic laws and promoting the entity's business.

We primarily reviewed the possibility of violation of the Act on Regulation of Gambling and the associated risks regarding the client's business promotion.

We thoroughly reviewed whether the services or products provided by the overseas entity constituted gambling activities. If the entity's business involved gambling, promoting it domestically could potentially violate the Act on Regulation of Gambling. Law firm Veat meticulously analyzed the legal risks that could arise during the process of the domestic entity promoting the overseas entity’s business, particularly considering the possibility of the promotional activities being interpreted as encouraging or participating in gambling activities. We also suggested opinions regarding whether the client could argue that it was unaware of the overseas entity’s business content if a clause restricting promotional targets to legitimate fields was included in the contract with the overseas entity.

• What is Gambling?

Act on Regulation of Gambling Article 2 Paragraph 1: “Gambling” means the act of collecting assets or property interests (hereinafter referred to as "assets") from multiple people and determining gains and losses through a random method, resulting in property interests or losses.

The Act on Regulation of Gambling is a law enacted to regulate gambling activities domestically and prevent illegal acts. Violating the Act on Regulation of Gambling can result in severe punishment. If an overseas entity operates a business that violates the Act on Regulation of Gambling, even the act of promoting it can become a legal issue. Therefore, domestic entities must comply with this law when entering into contracts with overseas entities.

To reduce the possibility of violating the Act on Regulation of Gambling, we recommended clearly limiting the promotional targets through contracts and promoting only legitimate businesses that do not constitute gambling activities. We also implemented thorough preliminary reviews and continuous monitoring of the overseas entity's business content and promotional activities to prevent legal issues and provided ongoing legal advice before and after contract negotiations to support the client in complying with the Act on Regulation of Gambling and other relevant laws.

Law firm Veat provided thorough legal advice to resolve these complex legal issues, minimize legal risks, and safely enter into contracts with overseas entities. It is necessary to clearly understand the scope of application and importance of the Act on Regulation of Gambling. We recommend seeking professional legal advice regarding the Act on Regulation of Gambling for stable business operations.

Law firm Veat has accumulated numerous case experiences through legal advice related to the Act on Regulation of Gambling. In particular, we have provided regulatory advice on new forms of games and entertainment services combined with the latest technology, supporting startups and IT companies to minimize legal risks and operate their businesses stably.

If your company needs professional advice on sensitive legal issues such as the Act on Regulation of Gambling, please feel free to contact Law firm Veat.

Thank you.

Law firm Veat