Further Arrests in China Add Legitimacy to Gambling Pastime

Macau, China, skyline showing high-rise casino resorts.

From the World Cup to a family occasion, the Chinese love to gamble. Despite this mature relationship with gambling, casinos are banned in mainland China.

While Macau, a Chinese territory, continues to shine brightly with Chinese cash (it overtook Las Vegas in total gambling revenue in 2007), the government refuses to consider the legalization of casino gambling.

Lotteries surge in China

This has led to a surge of the lottery in recent years, as the people seek a legal outlet for their gambling urges. China has two lotteries to choose from, the sports lottery and the welfare lottery. Both fund important schemes in the country and contribute in part toward the Olympic success that China is renowned for.

The government does not consider the lotteries to be gambling and seems satisfied that Macau and Hong Kong provide outlets for would-be punters. Indeed, the government announced a recent crackdown on online poker tournaments, driving the game further underground.

Bitcoin as an alternative

The rise of Bitcoin offers an alternative. Hugely popular in China, it is seen as a way to invest and increase assets. Bobby Lee, the co-founder of BTCC, one of China’s biggest bitcoin exchanges, said: “Chinese people lack a lot of opportunities to invest. Bitcoin is a high-growing, volatile asset class. In some ways, it’s a very ripe opportunity for day trading to make money.”

But cryptocurrency crackdowns continue, as the new currencies gain popularity among gamblers due to the difficulties in tracing them, driving a new underground market.

Police raids

The growth in popularity of betting in cryptocurrency has led to police in Asia cracking down on unauthorized operators during the World Cup. In China’s Guangdong province, police recently carried out 540 arrests linked to a large online soccer betting operation. It is reported that the operation processed $1.5bn (£1.14bn) worth of wagers during the event.

Police were made aware of the operation earlier in May and had been investigating it since, leading to their uncovering more than 20 local operations across China. Large amounts of assets were seized during the operation. This comes shortly after Chinese communication platform WeChat closed around 50,000 accounts for being linked to illegal betting related to the World Cup.

Football World Cup

Driving these underground operations is sports betting, which has felt an almighty surge thanks to this year’s World Cup in Russia.

In the three weeks running up to July 1, by the Chinese wagered the equivalent of $4.3bn (£3.26bn), a sixfold increase over the previous three-week period. It is thought that by the end of the tournament, the country will have generated $10bn (£7.6bn) worth of bets if numbers fall in line with the 2014 event.

These figures only include online legal betting, but it is thought that large amounts have also been wagered illegally during the same period, although it is difficult to estimate precise figures.

Although China did not have a team in the tournament, one lottery shop owner told First Post that over ten times the usual sum of bets was being processed daily by their business during the event.

According to the same source, people who previously did not bet are now joining in, as growing interest in the sport is leading to fans and viewers hoping to make some money from their knowledge and predictions. From big screens in fast food restaurants and kids playing in school, soccer is growing hugely in the country even though China has not had a team in the World Cup tournament for the last 16 years.

It is clear is that China needs an outlet to control its betting needs; Macau might not be enough. Perhaps instead of acting as a deterrent, these arrests are just seeking to legitimize the gambling needs of the nation.

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