China online gambling industry laws

Gambling in China

Gambling in China is considered illegal. The locals, regardless of the region, can play only one game run by the state, which is the lottery. The rest of the entertainment that implies placing bets has been moved to two gaming zones - Hong Kong and Macau. A total of four types of gambling entertainment are available in Hong Kong - mahjong, lottery, betting on horse races and football. Macau, however, offers a broad list of card games, roulette games, dice and slot machines among many others. Macau is virtually a Chinese casino city comparable to Las Vegas in the US. This gambling capital of China is a popular tourist attraction that features junket tours.In 2016 the gross gambling revenue in Macau was 217 billion HKD (Hong Kong Dollars). Steady growth of annual profits of 9% has been predicted up until the year 2020. At the same time, while most casino clients are VIPs, by 2020 the balance will shift towards gambling being a form of entertainment for the masses.

Casinos in China

Fully legal and licensed casinos are only present in two designated areas in China, as alluded to above. Strict controls are placed on which games arfe permitted and responsible gambling is very much the order of the day. Casinos must conform to strict laws and regulations. Reveue generated from casinos in China are now greater than the famous Las Vegas Strip and there is every indication that this trend is set to continue.

Gambling Games in China

Slots popular in Macau are the ones that were designed by the world-renowned developers that supply slot machines to land-based casinos. The slots include: Triple Diamonds, Hexbreaker, 88 Fortunes, Wheel of Fortune and Hot Shot. The list of the games most favoured by the Chinese population includes classical slot machines as well as modern-day five-reel slots that feature all kinds of bonuses. Most of the casinos have machines designed by Novomatic, IGT, SG Gaming and WMS. Machines with video poker and digital versions of table games are also in high demand. Poker slots, digital baccarat and virtual blackjack have gained the highest popularity. Slot machines are the most popular entertainment in Macau. As of 2016, all establishments in the gaming zone had a total of 13,826 various slots. Annual income earned by the casinos in 2016 was 1.43 billion USD from playing slot machines alone.

Gambling Legislation

Gambling outside of gaming zones in China is prohibited. Running underground casinos and betting points is punishable by law pursuant to Item 303 of the Criminal Code of the People's Republic of China. Gambling entertainment is only available in Hong Kong and Macau. Each of the cities has its own laws that regulate gambling services. This is what is allowed in Hong Kong: Bets on horse races and sports (football), Mahjong and the Lottery. Bets and lotteries in Hong Kong are run by the monopolist that has the government grant - Hong Kong Jockey Club (HKJC). These are the games available in Macau: casino table games (card games, dice, roulette, etc.), slot machines (video slots, video poker and digital versions of table games), sports betting and lotteries and other public games. The entertainment is available in more than 30 gaming establishments located in the territory of Macau. Land-based casinos are monitored by the Chief Executive of Macau and Gaming Inspection and Coordination Bureau (DICJ). Gaming regulators and laws that regulate gambling operations There is only one company that was granted a permit from the government to accept bets and purchase lottery tickets in Hong Kong. Hong Kong Jockey Club (HKJC) runs its operations in compliance with a number of laws that apply within the city boundaries exclusively: Betting Duty Ordinance, chapter 108 and the Betting Duty Ordinance, chapter 148. The conditions under which mahjong operates as a gambling game are considered separately. Mahjong clubs had their licenses issued over the period of 1842 until 1977, so long as Hong Kong remained a British colony. Once the city passed under the Chinese rule, issuance of licenses for mahjong clubs was stopped. But the establishments that were already opened continued their operations. Today there are 60 mahjong clubs remaining in Hong Kong. Other types of gambling, including poker, is banned in the territory of Hong Kong. Owners of illegal facilities will face fines or imprisonment. For the very first violation the owner of an underground gambling club will have to pay the fine in the amount of 10,000 USD. An organiser of games that were banned will be sentenced to three months of confinement. With each consecutive violation the amount of fine will increase (up to 30,000 USD) and so will the term of confinement (up to nine months).

Gambling in Macau

In Macau the gambling industry is regulated by the Chief Executive of Macau along with subordinate agencies — Gaming Inspection and Coordination Bureau. The Macau Chief Executive is in charge of outlining the gaming policies and licensing the casino operators in Macau. Subordinate agencies coordinate and monitor the gambling market and issue special licenses: to promoters of the gambling business and to manufacturers of electronic equipment for casinos and to manufacturers of gambling items (cards, dice, chips, etc.). Functions of the local authorities are guided by the Macau Gaming Law. The law establishes the legal framework for the organisation of commercial gambling. In addition, there is a number of clarifying laws:

  • Instant Lottery Law - regulates instant lotteries
  • Illegal Gaming Law - maintains the list of games and equipment that are considered illegal
  • International Gaming Tender Regulation - is a law that authorises foreign entrepreneurs to set up a gambling business in Macau
  • Gaming Promoters' Regulation - is the act that regulates the area of promotion and advertising of gambling, as well as organisation of junket tours
  • Gaming Credit Law - regulates issuing credits to casino operators and promoters of the gambling industry
  • Junket Commissions Regulation -  outlines the boundaries within which promoters of junket tours get their commission
  • Electronic Gaming Machines Regulation - monitors the issuance of licenses to manufacturers of casino equipment

The legislative framework contributes to the development of the gambling industry in Macau and to getting foreign entrepreneurs involved in the development of this gaming zone. The opportunity to receive a license in the gaming capital of China is what makes the worldly renowned operators place their establishments on the territory of Macau. This, in turn, will make the gaming zone more attractive for both tourists and locals.

Online gambling in China

Online gambling is banned in the territory of China Access to online gambling is only available in the gaming zone of Macau. Virtual entertainment where bets can be placed is regulated by Macau Gaming Law. This is where online gambling is called an interactive game. Interactive games are defined by the following criteria:

  • An external device is used in the game, such as a mobile phone, a personal computer, a laptop, a tablet, etc
  • The entertainment is provided in the form of a table game or video slots
  • Players deposit money or currency equivalent to money to conduct a game session
  • Throughout the game a player can win money or special currency, which will later be converted to monetary funds

Only private companies that have a permit from the Macau Government can provide online gambling services. For online platforms, however, there was no tender announced, by which concessionary agreements could be signed. Nor did the operators of land-based casinos receive the authorisation to provide online gambling services on the territory of Macau. This is the reason why there are no conventional online casinos available in China. Legislative regulations on visits to foreign Internet platforms have also been toughened. Up until recently there was only a firewall shielding the people of China from online gambling. Now the Government is going to block the access to online gambling entertainment by using VPN. Yet on the territory of Macau online bets are allowed to be placed on horse races, dog races and sporting events., These are the companies that are authorised to provide internet betting operations: Macau Horse Racing Company Limited, Macau (Yat Yuen) Canidrome Co. Ltd and Sociedade de Lotarias e Apostas Mútuas de Macau (SLOT).

Gambling Licensing

It is virtually impossible to get a license and provide gambling entertainment in Hong Kong officially. There is a monopolistic company that operates in the territory of the gaming zone, and licenses have no longer been issued to mahjong clubs since 1977. And yet HKJC can delegate some of its authorities to other companies. Only official partners of Hong Kong Jockey Club can accept bets on sporting events. The right to provide gambling services in Macau officially belongs to the local government. The Chief Executive of Macau grants concessions (official permits) to gaming operators in accordance with international tenders issued in 2001. These were the criteria by which the prospective players on the market were assessed:

  • Experience in operating gambling establishments
  • Prepared investment project
  • Development of casino sites and infrastructure that would contribute to the development of tourism
  • Creating jobs and willingness to train the personnel independently
  • Availability of funds to pay for the concessionary lease
  • Contribution into social programs and development of tourism in Macau
  • Additional investments into the development of culture, science, sports, education and the economy of Macau

To increase the number of operators, the Government authorised the concessionaires to grant their own sub-concessions. So, there are a total of six gaming operators represented in the gambling market of Macau. The permits will expire in 2020. Up until then no other companies can provide any gambling services in this gaming zone in China. 

Development of the Gaming Market in China

In China the gambling industry is associated exclusively with tourism and attracting foreign investors. This is why the country has no manufacturers of slot machines or casino equipment. All equipment used in the gaming zones is imported. The Macau Government issues licenses to major developers of technical solutions for land-based establishments. The operators fill the casino halls with the products made by world-renowned manufacturers. Prospects for future development of the gambling industry in China. Development of the gambling industry in China is quite limited. Gambling is banned all across the country, and only in the gaming zone of Macau sports betting, table games and slot machines are available. The gaming zone is developing in close connection with tourism. Casinos in Macau are part of hotel complexes with a developed infrastructure. Today this gaming zone is visited mostly by VIPs. But in the near future the balance is expected to shift towards greater accessibility on a mass-scale. Such change will bring more visitors to Macau. As a result, it will increase the profits that China receives from the gambling industry. According to the gambling analysts, until the year 2020 profits from casinos will be increasing by 9% each year. The Gambling industry in China is aimed at entertaining and attracting tourists to the country. The local population is carefully safeguarded from gambling. In Hong Kong the locals can bet on horse races and football, play the lottery and the traditional Chinese game of mahjong. In Macau the list of games is much broader. The list is comparable to European and American standards.

The development of online gambling is very questionable. Up until this day the Chinese Government has not introduced any bills that would allow providing gambling entertainment in the global cyberspace. It's not that the country has no domestic operators. It is forbidden to even visit foreign online casinos, including by using anonymisers. The only place where you can play online is Macau.

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