The history and culture of gambling in China is long and tangled. It roots down to centuries ago. Legend has it that the first lottery in the world was introduced back in 205 to 187 BC by the Han Dynasty. It was created with a very practical purpose – to fill in the state treasury. China’s oldest gambling instruments – dice cubes – are as old as 600 BC.
The Wei Kingdom, that ran from 4th to 2nd century BC, introduced the first precedent of gambling prohibition in China, and ever since, the regulations have been swinging back and forth, with bans on games of chance being imposed in certain territories, and lifted in the others.
China Online Gambling Regulation Loopholes
In 1935, the Criminal Code of the Republic of China banned all gambling activities and did not cut slack for even such traditional forms of gaming as Mahjong. This one was allowed only on some special holidays.
As of 1949, indulging in games of chance became an activity that was officially banned throughout most parts of China by the Communist Party. This makes not only offline but also online gambling illegal. Thus, in 2018, all instances of online poker were added to China’s crackdown on online gambling. However, with the Chinese online betting laws being far from perfectly worded, there is a loophole in the online gambling regulations.
Turns out, there is currently no specific definition of what online betting actually is. Which makes it hard to define proper penalties, as well. And which also makes it hard to regulate virtual activities – a perfect chaos, in which all sorts of offshore China-targeted online betting companies and websites are thriving, leading the government to lose billions of dollars of taxed income.
According to the research published in Economic Information Daily in 2019, the yearly yield of wagers placed in the China-targeted online offshore gambling market amountsto 145 billion US dollars. That’s twice the amount of the income received from the two online state lotteries legally backed by the government.
In order to avoid a ban on the direct marketing of online games of chance in printed and social media, many websites aimed at attracting more Chinese players, started sponsoring football teams of the UK leagues. Successful campaigns of Dafabet Fulham FC and Wolverhampton Wanderers are just two examples of such practices.
But China is losing not only in terms of money.
Ever since the Philippines introduced a piece of legislation, under which offshore gambling operators were allowed to register and work legally, over 100,000 Chinese citizens have moved to Manila to work in the gambling industry as marketing agents, technical support staff, and whatnot.
Some casinos blocked
Some transactions restricted
|Land-based||Online, operator||Online, player||ISP|
||Banned||Completely banned||No penalty||Some casinos blocked||Some transactions restricted||--||
China Online Gambling Laws: What’s Allowed?
While most forms of betting are under restrictions, the government does allow people to place bets on two-state lotteries. How so? The state does not consider this gambling. The Welfare Lottery was introduced in 1987. The Sports Lottery was established in 1994.
Also, the people of China can participate in betting in certain administrative regions:
In 1997, China gained back control over Hong Kong. The area managed to keep horse racing and sports betting legal, as well as preserved certain control over its other betting activities.
This area was historically prepped for being the perfect gambling escape. In the 16th century, the Portuguese, which colonized Macau in those days, introduced legislation that turned the trading post of Macau into a gambling haven. Sic Bo and Pai Gow were particularly popular.
Today, Macau is one of the few territories where all forms of betting are allowed. This turns the land into a gambling Mecca and a place for players from China, as well as tourists, to come and play. In 2012, MGM Grand held a poker event that was the first of its kind held on Chinese soil. In 2013, Macau casinos submitted a report that showed a record revenue of more than 43 billion US dollars.
In 2014, however, the financial prosperity went a bit south with the introduction of the anti-corruption drive. It was supported by President Xi Jinping. The drive led to the betting venues in Macao to register the worst revenues ever. By 2018, however, there was an upturn in fortunes.
In Taiwan, the first traces of gambling date back to the 17th-19th centuries. Fairly recently, in 1951, Taiwan accepted the Uniform Invoice Lottery. This allows for some forms of betting activities, while most gambling is still prohibited.
Hainan’s been struggling with receiving the proper status for gambling for years now. Its first attempts to liberalize the legislature and to attract tourists were held in 2009. In 2012, a first small land-based venue with baccarat and punto banco was opened in Sanya, but it was quickly closed by the authorities. In 2018, the state finally looked at the territory closely. There were talks of issuing a proper gambling status to Hainan and of relaxing visa rules.