China fights illegal online gambling

A few months ago it was announced that The People’s Republic of China will proceed in a stricter way against illegal online gambling operators. Now it has also been announced that the government wants to adapt the national betting laws, so that those responsible in the future can even face imprisonment. These laws are not only applicable for the providers of gambling sites, but also for providers of country based casinos.

The minimum penalty will be five years imprisonment. Whilst in Germany the online gambling market is opening gradually and is moving away from the legal grey zone, other countries such as China are completely blocking the way for online gambling. The reason here being especially the culture of the country. Will the complete ban on gambling accompanied by several years of imprisonment be the right way to do this?

The decision against illegal online gambling 

The ruling powers in China have been proceeding against illegal providers of internet gambling for some time. The main aim should be to tackle international internet gambling providers which target China and “destroy them as a criminal organisation”. This was uttered by the Chinese Minister Zhao Kezhi, from the security ministry. The experience of other countries shows that it is not an easy task to fight online gambling. Whenever (legal) online gambling providers are banned, many players turn to illegal gambling providers, who are located in foreign countries and cannot be monitored by the government.

To prevent this from happening, the Chinese government plans to monitor the money flows of the gambling industry very rigorously. The only credit card provider in the country, China Union Pay has already taken action some months ago. Since then the credit card institute forbids payments, which are connected to gambling activities.

Imprisonment for illegal gambling is planned in China

In October 2020 the Chinese legal authorities announced, that in the future banned internet gambling providers will receive harsher punishments. Imprisonment for up to ten years is planned for those responsible for online gambling. China wants to proceed even against small offences and therefore stipulated the minimum punishment of five years. The financial Regulator in China lately announced, that between January and September 2020 assets worth around 140 billion US- Dollar was transferred from China to foreign gambling providers. China is also focusing on the local casinos. Those who for example operate a casino illegally should expect similar sanctions as the operators of banned online gambling sites. However the perennial punishment for those responsible for online gaming providers is still being reviewed and has not been adopted yet. At the moment it is only a suggested law. A final vote is planned for the 19th. November 2020.

Should the suggested law be adopted, this will impact the online gambling market in China massively. It is expected, that the number of virtual casinos on offer will decrease drastically, since those responsible will not accept a prison fine. It is still not clear if the participants will also be subject to a prison sentence.

Will the Chinese stop gambling?

It is not clear, whether the Chinese will stop gambling online. The harsh punishments are definitely a deterrent. However the bans imposed on online gambling providers by other countries have shown, that one day or another the gamblers will look for alternative online gambling providers. Should the financial transactions be really monitored, the Chinese will encounter several problems to transfer money to online gambling providers. If one looks at it macro socially, gambling is still frowned upon in China.

China – the country of bans?

It is not only gambling which has been banned for some time in The People’s Republic of China. The country which has 1,4 billion inhabitants is also famous for its restrictive policies. With the exception of the government approved Lotto Companies, all types of gambling activities are forbidden in China. Not only Crypto currencies, but also some Apps and Services are prohibited. This is also the case with claw cranes, which are usually found in fairs and amusement parks.

Conclusion

590 persons have this year already been detained in China because they were accused of taking part in illegal gaming activities on the internet. The Chinese government now wants to proceed severely against the providers of online gambling and subject them to a prison punishment of a minimum of five years and a maximum of ten. It is questionable how China will identify and make contact with those responsible at the online gambling providers and eventually proceed against them. At the end of the day the managers of the illegal online gambling companies reside mostly in foreign countries and therefore are not so tangible for the Chinese government. It is however a fact, that gambling in Germany is culturally viewed differently than in China. Therefore it is no wonder that the activities in online casinos are more tolerated here than in a Communist country like China.

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