3 minute read
LAST WORD
China puts online gambling in its crosshairs
Sharon Singleton | Managing Editor, AGB
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Once again Beijing is flexing its muscles and this time is sending a clear warning signal that online gambling targeting its nationals won’t be tolerated.
In July, Public Security Minister Zhao Kezhi pledged to resolutely crack down on cross-border gambling, including those recruiting gamblers from China through overseas casinos. Cited by state news agency Xinhua, he warned that police will crackdown on underground banks and payment platforms that facilitate the movement of funds and that he will seek international cooperation to stamp out “such crimes.”
He was speaking just days after state media singled out Macau’s largest junket operator, Suncity Group, accusing it of illegal online gambling and proxy betting. The unusual step prompted Suncity CEO Alvin Chau to call a press conference to vehemently deny the allegations. He nevertheless apologized to the Macau government for any inconvenience the reports may have caused.
The Suncity incident and Zhao’s comments potentially have far-reaching ramifications for other jurisdictions in Asia, most notably the Philippines and Cambodia.
Although it is strictly illegal to target Mainland clients, it’s clear that gaming companies in both countries have been doing exactly that for some years now. Both have seen a massive influx of Chinese workers into the online industry to man their call and service centres with Mandarin-speaking staff.
For some time now the Philippine government has been seeking to crackdown on Chinese flooding into the country’s online gaming sector without proper visas and without paying the right level of taxes. It’s probably fair to say that some of these efforts stem from a desire from the Philippines to put its own house in order before Beijing does it for them, thereby retaining what has become a highly lucrative source of income for the government.
The operators themselves are also well aware of the potential problems they could face if they don’t tread carefully, with master licensor Oriental Game recently announcing that it plans to set up two hubs to house the ballooning number of Chinese workers and companies.
It argues that these centres, one in the north in Clark City and one in the south in Cavite, will make it easier to oversee and regulate the online gaming companies. As a reward for its efforts and to attempt to lure out underground operators, the Philippine Amusement and Gaming Corp. has said it will grant five-year licenses to those settling in the zones, compared with the three years available elsewhere.
Whether Philippine efforts to tidy up before Beijing gets more heavy handed are successful remains to be seen.
In some ways you could argue Beijing has been remarkably tolerant for some time, prompting the question as to why now?
Given the influence China wields in Cambodia, it wouldn’t have been hard to pressure Phnom Penh or Manila to turn off the taps years ago.
Some argue that China knows its people will gamble come what may and it’s better for Beijing to have them do so in countries where it can exert control. Prime Minister Hun Sen is a close ally of President Xi Jinping, while since coming to power Philippine President Rodrigo Duterte has hitched himself to the mast of the regional superpower. That hasn’t changed.
What has changed is China’s economic growth. The trade war with the U.S. has put the brakes on the economy, which slumped to a 27-year low in the second quarter. As it grapples to right the ship, it may have become far less tolerant of anything that potentially leeches money out of the country or its citizens.
