Police bust $2.8b gambling ring that used deepfake video to lure gamblers

South Korean police have dismantled a massive online gambling ring worth 4 trillion won ($2.84 billion), apprehending 50 suspects accused of running the online operation since 2019 and employing deepfake technology to lure new users, according to the Ulsan Metropolitan Police Agency on Friday.

According to police, out of 50 suspects, 13 have been arrested, including the website operator in his 40s. The remaining 37 have been forwarded to prosecutors.

From October 2019 until March 2024, the 50 suspects allegedly operated gambling sites after placing their servers overseas, in countries such as the Philippines and Thailand, with operational offices in Bucheon, Gyeonggi Province, as well as Incheon.

Police added that those who oversaw promoting the gambling website and recruiting new members into their program did so with gambling broadcasts through YouTube while also using deepfake technology to alter their faces and voices to those of celebrities.

The deepfake technology was used to avoid the exposure of the promoters’ identities and to also stimulate gamblers' interest, according to police.

Once users signed up to become regular members of the website, they could bet large sums of money on online casino programs and sports betting game Sports Toto, a legal form of sports gambling that it had allegedly altered illegally.

To conceal the flow of funds, users were required to convert cash into an online currency through a specific application, from which users were only allowed to use virtual accounts to access their gambling websites. According to police, the suspects had recruited employees with experience working in application development and payment gateway companies to set up the system.

Police added that they believe the suspects pocketed up to 30 percent of the money users lost to gambling and made 300 billion won in unfair profits. The 40-something manager allegedly bought an apartment, a sports car and a luxury watch with criminal proceeds.

Through an analysis of the suspects’ bank accounts, police were able to identify the scale of illegal profits the suspects had concealed and seized assets valued at around 10 billion won in real estate, luxury goods and deposits before prosecution.

In addition to the 50 individuals that have been apprehended thus far, police added that the website operator based overseas was arrested in collaboration with Interpol and immigration authorities in the Philippines in July, and they are currently proceeding with the extradition process.

Police also identified up to 107 users of the gambling site, who are currently being booked on gambling charges. Many of the 107 users were also underage, according to officials.

Police are also conducting further investigations into specific methods used for the site's operations and money laundering.