The CEO of online games company Boyaa Interactive will serve a 12-month prison sentence in China for bribery.

Zhang Wei poses for a photo opportunity to celebrate the launch of Boyaa Interactive on the Hong Kong Stock Exchange in 2013. Its share price dived by 12 percent in the wake of China’s online social poker ban. (Image: Stringer/Reuters)

The Hong Kong-based social games outfit announced Friday that Zhang Wei had failed in his appeal to have the charges quashed by the Higher People’s Court of Shenzhen and had resigned as CEO. He was initially sentenced in May having been found guilty of “bribes by entities.”

The specifics of these “bribes” is unclear, but the timing of his arrest last April was significant. It came just one week after Chinese state media announced a ban on just the kind of play-money social poker and chess apps Boyaa provided.

Gateway Drug

Three executives of Ourgame — another Hong Kong-based social poker company, which acquired the World Poker Tour in 2015 — were also arrested around the same time. Ourgame had responded defiantly — and perhaps rashly — to the announcement of the crackdown last May.

[Social poker] not only plays an important role in the creation of social, cultural and economic values, it also acts as a bridge between China and the world’s intellectual sports,” it said. “Ourgame will continue to introduce and hold more top-level intellectual sports events and promote the global spread of chess and card culture.”

Beijing’s beef with social poker apps appears to be that they can be used as a recruitment tool for illegal underground games, and that players were using them to gamble online for real money by using the play money chips as markers before settling up in real cash.

Poker Boom Postponed

South East Asia had been experiencing something of a tournament poker boom until the crackdown arrested its development. Tournament fields in Macau and Manila were bustling, fed by enthusiastic players from mainland China who had qualified through play-money apps like Boyaa’s.

Boyaa’s stock plummeted 12 percent in the wake of the ban. As owner of the Boyaa Poker Tour (BPT), its business model relied heavily on using its play money poker app in China as a feeder for live tournaments. The BPT website shows it has yet to hold a single event in 2018.

Boyaa recently reported its Q2 earnings fell 34.4 percent, largely due to “the effect of regulatory risk regarding the market rumor of the implementation of the ‘Administrative Measures of Online Chess and Card Games.’”

It has also said that there was “insufficient legal basis” to support the charges against its CEO, according to its legal counsel.

The People’s Court disagreed.