Chinese Government Net Widens on Illegal Online Operators

The People's Republic of China has unleashed a severe campaign against illegal online gambling within its borders.

High-level Corruption

The hard-line approach is indicative of an expanding crackdown on what sources call “higher level corruption” within the state lottery system.

Global Impact for Online Operators

Though anticipated for weeks, the crackdown could still have global ramifications for gambling operators in other large markets outside China such as the UK. This is due primarily to the fact that Chinese gamblers account for up to 50% of many offshore sports-betting and gambling sites.

The anti-corruption campaign headed by President Xi is expanding in scope. Large-scale busts have already taken place such as the arrest of over 1000 Chinese gambling employees in one recent bust alone, as well as the seizure of over 330 million yuan and multiple arrests made after a sweep of illegal online betting sites in Guangdong.

Thai Servers Support Local Activity

More operators were detained after the Chinese government discovered a total of over 200 non-sanctioned sites receiving traffic via Thai servers, which Chinese news agency Xinhua estimates was processing a combined 400 billion yuan worth of bets per month.

Guangdong provincial department of public security spokesman Lu Feng called the case “the largest online gambling case that has ever been cracked on the mainland since the founding of People’s Republic of China in 1949.”

Legalised Gambling in China also Hurt

Currently, the island region of Macau is the only Chinese region to offer legalised gambling. Macau casinos are expected to lose high-rolling foreigners, while many Chinese nationals instead are opting for casinos in nearby countries such as the Philippines, South Korea, Vietnam, Cambodia, Australia and Singapore.

Despite the current illegality of online betting in China outside of government-approved lotteries, online gambling remains a huge business on the Chinese mainland. In other words, offshore operators can expect the crackdowns to continue, while Chinese gamblers either continue to gamble illicitly online or seek safer harbor outside the jurisdiction of the Chinese government.