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Dealing with Gambling in Mainland China: in Need of Clear Regulations
and Sound Public Policies
Changbin WangAssociate Professor
Gaming Teaching & Research CenterMacao Polytechnic Institute
Legal and illegal gambling in Mainland China
• The only form of legal betting in Mainland China is lottery which is regulated by The Lottery Regulations, an order of the State Council
• Criminal gambling under the Criminal Law:– for the purpose of making profits, gathering people to
engage in gambling or making gambling a profession– Running a gambling house
• Casual gambling is permitted provided that– the money or property involved is a small amount; and– no one makes profit from hosting the casual gambling
• Usually providing game venues with charging normal rent or service fee is allowed
The problems of The Lottery Regulations
• Fails to specify what lotteries are permitted, what lotteries are not– The two state-owned lotteries, China Sports Lottery and China
Welfare Lottery, are left to decide, subject to the approval of the regulatory bodies, the types of lottery to be sold
– leads to over expansion of lottery in terms of both lottery types and lottery sales
• Fails to spell out the features of an illegal lottery– Art. 5: The related authorities shall investigate and handle illegal
lotteries and maintain the lottery market order– But what is an illegal lottery? How to identify a lottery from the
similar commercial schemes?
• Fails to formulate effective measures to deal with problem gambling
Over expansion: lottery types (1)
• Number game lotteries– Pick several numbers out as lucky ones from a group
of numbers
– Two types of number draw lotteries• Scheduled draw games which take place daily, weekly or
multiple times per week
• Rapid draw games which take place every certain number of minutes, very similar to keno
– Around 100 different variations of number games in total because the offerings differ by province
• Instant lottery-scratch cards
Over expansion: lottery types (2)
• VLTs (video lottery terminals)– approximately 28,000 VLTs in approximately 1,000 VLT halls
across China– Some are merely virtue scratch cards, others are actually slot
games
• Sports betting– major focuses are basketball, football (soccer) and baseball,
including nearly every league from all over the world such as NBA basketball, MLB baseball, English Premier League (EPL) , etc.
– multiple ways to bet: pari-mutuel & fixed-odds
• Online betting– Licensed lottery vendors partner with website providers– Website providers are supposed to be approved but many aren’t
The Regulations fails to spell out what a lottery is in nature
• The definition of “lottery tickets” in the Lottery Regulations: those tickets that are franchised, issued and sold by the state for the purpose of raising public welfare funds and promoting the development of public welfare establishments, and are voluntarily purchased by individuals, and out of which a prize may be won according to certain rules.
• But how to identify a lottery from a variety of commercial schemes?
Sales with prize draw
• Sales with prize draw are considered as normal commercial promotion and regulated by the anti-unfair competition law in China– The highest prize cannot be over RMB 5,000,
otherwise can be fined RMB 10,000-100,000
• Many sales with prize draw are essentially a lottery, but they have never been punished as an illegal lottery
• An illegal lottery is a criminal with a punishment of maximum five-year imprisonment and a fine of 1-5 times of illegal gains
Other schemes
• Many similar games such as tempting television audience to call in and solve riddles with prize draw, paid text-message voting with prize draw are also not treated as a lottery
• A clear definition of lottery should be made and the Chinese law community should deepen their understanding of lottery
Lack of effective measures to deal with problem gambling
• Lottery is promoted tirelessly as a money machine while problem gambling is hardly paid attention
• Although the Lottery Regulations prohibits selling lotteries to minors, it is only a principle provision and there is no further measures to carry it out
• Sound regulations are needed to protect the vulnerable, especially in VLTs, online betting and rapid draw games
Is organizing a Poker contest “running a gambling house”?
• The Criminal Law forbids running a gambling house but not specifying what is gambling
• The organizers of a Poker contest in Jiangsu province in 2015 were held by the police on a charge of running a gambling house because the organizers would make profit from the event
• Similar contests organizing previously in other provinces where a Poker contest was regarded as sport were not charged. Some provincial governments even legalized Poker contests with their regulations
How to regulate casual gambling
• Casual gambling is permitted provided that– the money or property involved is a small amount; and– no one makes profit from hosting the casual gambling
• providing game venues with charging normal rent or service fee is allowed
• problems– What amount of money or property is considered small?– How to differentiate “raking” from “ normal service fee”?– Should any casual gambling in so-called “chess and card
room” which can be accessed by the public be allowed?– How to license the “chess and card room” which is
involved with casual gambling?– Should Poker contest be allowed or not? Is it ok for charity
fund raising? How to license this kind of activities?
Conclusion
• In general, the laws, regulations and policies in Mainland China are too sketchy to deal with the complicated issues of gambling
• A special anti-gambling law which should clarify– the public policy to gambling
– a definition of gambling, ie., what factors are essential to recognize gambling
– how to regulate legalized casual gambling
– what measures should be taken to cope with problem gambling
