• Gustavo Fiorello

Online gambling in China - The problems with new trends for old habits

With the COVID-19 outbreak restricting all kinds of social gatherings, Chinese players have gone online to satisfy their betting needs. But what is the social and legal status of online gambling in China?



From crickets and cockfights to traditional majiang and modern poker, betting for money has a long history in Chinese society. The virtual factor has pushed the gambling culture to the next level—creating a niche. Its popularity and profitability, however, allow online gambling to resist the illegality imposed by Chinese law.


During the Reform and Opening-Up Policy, the government officially acknowledged gambling and lottery. Following a growing liberalization of Chinese civil society and its newfound demand for a “leisure market,”1 online gambling started in mainland China in 1995 so that soccer fans could bet on their local leagues.2


What does Chinese law say about online gambling?

Despite this apparent opening, the government still maintains tight control over such activities. Any form of gambling (excepting Macau and Hong Kong) is regulated under the first section of Chapter IV of the Chinese Criminal Law, promulgated on March 14, 1997:

“Whoever, for the purpose of profit, gathers people to engage in gambling, runs a gambling house or makes gambling his profession shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or public surveillance and shall also be fined.”3


The current legislation does not differentiate between the physical and the virtual types of gambling. Both have been subject to the same legal punishments. However, the article criminalizes the activity of organizing gambling without mentioning the will of the betting participants. Due to that, casual gambling (in majiang, for example) often goes unpunished, with rare cases of actual arrests and prosecutions.


Online games, real-life problems

Authorities find themselves, nonetheless, in a difficult situation when it comes to online gambling. Virtual casinos and gambling websites in China are hosted on offshore servers. Accordingly, they are often tied to other criminal activities such as fraudulent transactions, money laundering, and bribery to local authorities.4 Countries such as the Philippines and Myanmar form a complex net of intermediaries to and from mainland China, where payment services and e-commerce apps like WeChat, Alipay, and Pinduoduo mask cross-border bets by players.5


The result is that online gambling websites keep a constant profit of billions of yuans every year. The ‘offshore effect’ is the primary source of impunity for these organizations.6 Accordingly, the government resorts to other methods such as the Great Firewall (to block access to gambling websites on the Chinese internet) and crackdowns by the police in mainland operators. Even soft power has come to play, with Chinese authorities addressing the issue in diplomatic meetings and demanding collaboration from their Asian neighbors.7

Following the COVID-19 outbreak, the problem has become starker, with thousands of gamblers migrating to online games due to the physical restrictions of all gatherings imposed by the government.8 As long as the situation remains so, it is unclear how long this new trend will remain in China.


 
References / To go further
  1. Elisabeth Papineau, “The expansion of electronic gambling machines in China through anthropological and public health lenses,” Asian Journal of Gambling Issues and Public Health 3, no. 3 (2013): 2.

  2. Chi Chuen Chan et al., The Psychology of Chinese Gambling: A Cultural and Historical Perspective (Springer Press, 2019), 131.

  3. “Criminal Law of the People's Republic of China,” China.org.cn, February 11, 2011, http://www.china.org.cn/china/LegislationsForm2001-2010/2011-02/11/content_21899017.htm.

  4. “Criminal Law.”

  5. Yuan Ruiyang, Ye Zhanqi, and Han Wei, “How China's e-commerce giants enable illegal online gambling,” Nikkei Asia, November 18, 2020, https://asia.nikkei.com/Spotlight/Caixin/How-China-s-e-commerce-giants-enable-illegal-online-gambling.

  6. Holly Chik, “China’s crackdown on cross-border gambling aims for payment platforms and others abetting,” South China Morning Post, April 9, 2021, https://www.scmp.com/news/china/politics/article/3128949/chinas-crackdown-cross-border-gambling-aims-payment-platforms.

  7. Philip Conneller, “China Online Gambling, Fraud Crackdown Causes Mayhem on COVID-19 Stricken Myanmar Border”, last modified July 19, 2021, https://www.casino.org/news/china-online-gambling-crackdown-causes-mayhem-on-myanmar-border/.

  8. “China Online Gambling.”