China Continues World Cup Sports-Betting Crackdown with 540-Arrest Sweep

Map of Guangdong Province

Authorities in China’s Guangdong Province staged a series of raids targeting the operators of dozens of China-facing online gambling site offering sports-betting services for the just-completed FIFA World Cup. A total of 20 different enforcement agencies arrested at least 540 people associated with the gambling operations.

China’s anti-gambling enforcement agencies have just wrapped up the latest and largest of an ongoing series of actions targeting illicit sports-betting operations that have offered online but illegal wagering services in connection with the just-finished FIFA World Cup. An announcement issued by authorities in China’s southern province of Guangdong declared that an inter-agency action known as “Net Net An Net No. 9” has taken down an extended network of illegal, China-facing sites, resulting in the arrests of more than 540 individuals. Officials allege that at least 10bn Chinese yuan ($1.5bn; £1.13bn), was wagered through the illegal sites.

The sweep is the latest and largest of four such World Cup-related crackdowns in China, in addition to similar actions in nearby Southeast Asia countries. Sports betting is officially illegal in most jurisdictions in the region and especially in the (mainland) People’s Republic of China, where extended government action has targeted the proliferation of gambling in general, which is prohibited on the mainland except in the gambling enclave of Macau.

Crackdown targets ‘dark net’ sites

According to the latest state announcement, this massive crackdown targeted at least 70 online sites and smart-device apps that were available to Chinese consumers for betting purposes. Many of the online sites consisted of numeric domain names and less popular — thus cheap to obtain and use — top-level domain suffixes. Officials characterized many of the sites and the network in general as operating on the “dark net,” with advertising and recruitment done largely via popular online Chinese chat platforms.

Few of the sites were thus “named” in a formal sense, though the Guangdong announcement noted that a handful of sites such as “Crown” (not to be confused with Australia’s CrownBet), “New Lisboa,” and “Yongli” were among those targeted. Most of the offending sites have since been rendered inoperable.

Recruitment for the sites was done in a pyramid-style arrangement, with a share of profits being directed up the pyramid or informal corporate tree to those primarily responsible for the creation and promotion of the sites and networks.

The crackdown centered on the southern Chinese city of Maoming. A total of 21 different enforcement agencies took part in the massive action. This “Net Net An Net No. 9” action was part of a larger anti-sports betting enforcement project called “Net Net Annet 2018,” originally coordinated by Guangdong’s Ministry of Public Security. In addition to the 70 online sites and smart apps destroyed, the action shuttered at least 250 online chat groups (one of the recruiting mediums used). The Guangdong announcement also reported that more than 20 “gangs” of illegal sports-betting operators were dismantled via the sweep.

Cryptocurrencies figured large

Among this action’s interesting sidelights is that the sweep is claimed to be the first major anti-gambling action targeting a network using cryptocurrencies as a transaction medium. All of the sites, according to the official statement, allowed for deposits and withdrawals via three popular cryptocurrencies, Bitcoin, Litecoin, and Ethereum.

Similar language found on many of the illegal China-facing sites declared that they “support the world-wide Bitcoin, Ethereum, and Litecoin to recharge, and dozens of countries in the world work simultaneously,” even though the sites were all Chinese-language. A large number of computers and other electronic devices central to the network’s operation were seized as part of the roundup.

As is typical with enforcement actions in China, the full names of those arrested were not released. The official report mentioned only one person, and that by surname only, Wenhou. People found guilty of gambling crimes in China can face stiff fines and lengthy prison sentences, despite gambling’s huge popularity in the region.

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