Online gambling is prohibited in China with the exception of the Welfare Lottery and the Sports Lottery. The China Welfare Lottery Issuance Center (CWLC) is regulated by the Ministry of Civil Affairs while the China Sports Lottery Administration Center (CSAC) is regulated by the General Administration of Sports. The potential revenue to be earned from a wider range of online gambling is in the billions within the Chinese market not to mention the number of casino games that have derived from the region, so you’ve got to wonder why it’s banned.
China has given the world Keno, Pai Gow and Mah Jong but under the current regulations gambling is restricted both online and off.
To be more specific, not all forms of gambling are banned, and players are still ultimately able to access both offline and online operators.
For one, lottery games and sports betting practices are authorized by the government; the aforementioned organizations – the Welfare Lottery and the Sports Lottery are both eligible operators.
They are able to provide lottery tickets and sports betting, even though they also faced the ban that was lifted solely for the 2014 World Cup. At that time, a massive number of offshore interactive gambling operators additionally flooded the Chinese market, but not for long.
Five to seven years of jail time had been appointed as penalties following this major sporting event – up to 68 individuals were convicted in total. They were either charged for participating in interactive gambling or acting as an agent to such a platform, while some were charged on both offenses simultaneously. Considering that article 30 of the Chinese Criminal Act claims that no one is supposed to organize groups and provide them with such services for their personal profit, and the function of a gambling agent readily matches the definition of an illegal operator, both their actions are against the law.
Macau and Hong Kong
Macau and Hong Kong are classified as Special Administrative Regions; however Chinese visitors are required to obtain visas to enter these regions. These locations are governed by different laws than the rest of China with casino gambling allowed in Macau and horse racing available in Hong Kong.
The Chinese government does not have legislation in place for the Macau industry but it is more difficult for Chinese citizens to receive visas for Macau. The gambling business in Macau is much bigger than it is in Las Vegas. In fact, the daily revenue in Macau is nearly equal to the monthly revenue in Sin City.
China has busted many illegal online gambling operations. The government does not prohibit the average Friday night poker game; however running a gambling establishment for profit will inevitably be shut down and result in serious jail time.
Further indication towards this fate for illegal online providers is the constant reiteration of this stance by the Chinese government. Just in August 2018, the Ministry of Finance confirmed their well-known decision to ban online ticket sales and betting practices from occurring on any one interactive platform.
In response, the Apple company made it pretty clear that the statement has been heard – they pulled out about 25,000 apps from the China Apple App Store that facilitated gambling, and further removed a number of VPN programs. The latter could be used to divert the players’ actual locations to jurisdictions other than China, making the company an indirect participant in the act.
The protective and legally compliant move by the tech giant Apple got operators worried about their future. This matter became all the more imminent as the Ministry of Finance introduced a range of changes to the proper regulative for lottery and sports lottery ticket sales, offline and online. Since September 2018, the two sole licensed operators are only able to offer offline tickets after meeting the new and simplified regulations; this novel authorization legislative made the licensing process easier for online lottery and sports betting as well.
Is there a future for online gambling in China?
In 2005, the government published judicial interpretations of article 30 of its criminal law. The law stated: “Whoever, for the purpose of reaping profits, assembles a crowd to engage in gambling, opens a gambling house or makes an occupation of gambling is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention or control, in addition to a fine”.
The following was added: “Whoever, for the purpose of reaping profits, sets up gambling websites on the internet or acts as an online gambling agent will be regarded as ‘opening gambling houses’ and will be punished according to article 303 of the criminal law”.
Operators have defended the gambling services made available to Chinese punters...
... based on the premise that there are no laws against operators located outside of China providing remote gambling services yet Chinese gamblers are in violation of the law each time they access such services.
Nevertheless, the most recent legal actions taken by the Chinese government definitely create a more promising climate for future growth and development. Land-based establishments have also been able to expand on their offering – AGTech received authorization to supply over 70,000 terminals in the provinces of Zhejiang and Hubei, increasing the sports lottery terminal market offering by up to 50%.
Horseracing was also introduced as a new gambling form...
... in the Hainan Province, and further positive attitudes were expressed towards interactive lottery and sports betting products. Still, the government’s opinion only grows stricter when it comes to all other forms of offline and interactive gambling practices, even in regards to free-to-play platforms (the latest ban was imposed 1 June, 2018, on all free-to-play interactive poker platforms).
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