China Cracks Down on Foreign Operators Marketing Gambling to Its Citizens

Posted on: March 30, 2017, 12:00h. 

Last updated on: March 30, 2017, 12:05h.

China is to tighten the thumbscrews on gambling, with a specific focus on foreign operators that market their services to Chinese citizens, as well as online gaming sites that target the country.

 Guo Shengkun orders gambling crackdown
Chinese Public Security Minister Guo Shengkun said this week he wants to punish companies and individuals involved in “enticing and organizing Chinese tourists to gamble in overseas casinos.” (Image: South China Morning Press)

The state-run Xinhua news agency reported that Public Security Minister Guo Shengkun has promised “severe punishment” for foreign operators who flout the gambling ban on the Chinese mainland.

Guo has organized a special meeting of the country’s top police officers to draw up plans to tackle cross-border gambling.   

“We must seriously investigate and severely punish those companies and individuals involved in enticing and organizing Chinese tourists to gamble in overseas casinos,” said Guo. “We must severely punish those casino-related illegal labor agents and crack down on activities for investing in overseas casinos,” he added.

Guo ordered police to target criminals gangs that facilitate online gambling and to show no mercy to “underground banks” that manage the flow of cash to fund cross-border gambling.

Operation Chain Break

This is the latest phase of “Operation Chain Break,” a campaign designed to stop the flow of money from the mainland to casinos abroad, as capital flight puts pressure on the yuan.

The operation, itself part of a wider corruption crack down from Beijing, put the has already put the squeeze on the junket operations of Macau, contributing to the gambling hub’s two-year economic plunge, from which it is only beginning to recover.    

In October, the arrest of 14 Crown Resorts employees, including three Australians, sent shock waves through the global casino industry. The staff were detained in least four cities across China on October 13 and 14 on suspicion of “gambling offenses,” most likely marketing the company’s services to VIPs.

Almost five months later, they remain languishing in the Number One Detention Center in Shanghai, their fate uncertain.

The incident has caused many casino operators, from Melbourne to Singapore, for whom Chinese VIPs represent a sizable portion of revenue, to rethink their policy in China, not least Crown Resorts, which reported that its VIP business had nosedived in the months since the arrests.

Australia Snubs China Over Extradition Treaty

China was frustrated this week in its efforts to pursue “cross-border criminals” when Australia failed to ratify its extradition treaty with the country. A vote in the Australian Parliament on the ratification, scheduled for Wednesday, was pulled on Tuesday due to political opposition.

The Australian Labor Party cited concerns about China’s humanitarian record and its treatment of prisoners in particular. Those Crown Resorts employees were presumably at the forefront of their minds.