GGRAsia – China says probe on outsiders urging its people to gamble

China says probe on outsiders urging its people to gamble

Feb 05, 2021 Newsdesk Latest News, Macau, Rest of Asia, Top of the deck

Mainland China residents involved in “cross-border gambling crimes” were on Friday instructed either to “turn themselves in” to the authorities by April 30, or to report – and assist a judicial investigation into – such crimes. The call came in a joint announcement by three mainland law-enforcement bodies during a media briefing.

At the briefing, such crimes were said to relate to “backers and investors of the gaming groups outside China that solicit our people to gamble”. They were also being investigated, said the authorities, without naming them.

Brokerage Sanford C. Bernstein Ltd said in a Friday note: “China pressure intensifies on overseas gambling and online gambling activity.” But the institution said it did not think the moves were targeted at Macau’s casino operations.

Changes to China’s criminal code, to take effect from March 1, make it illegal for anyone to assist others in “cross-border gambling”.

Another note on Friday from analysts DS Kim and Derek Choi, of JP Morgan Securities (Asia Pacific) Ltd stated: “While the scope of the law… probably covers gambling in Macau, we don’t think the crackdown itself is targeting Macau casino operations.”

According to Friday’s briefing, if mainland residents involved in “cross-border gambling crimes” confess to the authorities by April-end, they will be shown leniency by the country’s judges. China’s Ministry of Public Security, the Supreme People’s Court and the Supreme People’s Procuratorate hosted the briefing.

Liao Jinrong, director of the international cooperation department at the ministry, said police had already taken up legal enforcement against 35,000 people throughout the country that were allegedly involved in gambling activities during 2020.

Zero tolerance

“Our goal is to completely paralyse the soliciting networks by the gambling groups working outside our country that targeted our people, and we will not give up until we achieve our goal,” said Mr Liao in the Friday press briefing.

“Currently we are investigating a large number of cases, with a focus to combat the backers and investors of the gaming groups outside China that solicit our people to gamble, as well as the many staff, technicians and illicit capital that support these cross-border gambling activities,” Mr Liao added.

Li Ruiyi, a judge of China’s Supreme People’s Court, who attended the briefing, commented on the change in the criminal code.

It showed China’s “determination” to tackle cross-border gambling crimes, said Mr Li, adding the definition of such a criminal act included gambling at casinos outside China’s borders, and also online gambling.

With the criminal law amendment, the “target of penalties” was the “casinos’ operators, actual controllers, investors, managers or those that profit from casinos, gaming rooms and gaming tables; and also the builders, providers and users of the online gaming sites and the relevant applications, as well as the funders, managers and agents that profit from it,” the judge told mainland China media.

Sanford Bernstein said in its Friday memo on the latest news from the mainland authorities: “The extent of direct impact on Macau is that China does not want Macau used as a hub for illegal activity with criminal elements targeting Chinese visitors in Macau to go overseas or sign up for illegal online gambling applications.”

“As a result, Macau will cooperate with the [mainland] China authorities most certainly to crack down on any such potential activity,” said Sanford Bernstein analyts Vitaly Umansky and Tianjiao Yu.

They also wrote: “Overseas casinos, that rely significantly on junkets are clearly in the cross hairs and will suffer the impact – especially if China has plans for long-term enforcement of the existing policies (which we believe China does).”

JP Morgan noted for its part, that China’s “scrutiny on junkets/agents, who are also involved in foreign casinos, not just Macau’s, is escalating to unprecedented levels, which in turn will continue to cripple their abilities to bring players to casinos – foreign or otherwise, including Macau”.

(Updated Feb 8, 11.15am)