China’s Hainan Province Denies Lifting Ban on Gambling, Prostitution, Pornography

Reports that China’s Hainan Province had scrapped its prohibition on gambling, prostitution, and pornography have been misconstrued, local officials have said.

The Hainan Daily reported on Sunday that the provincial government had voted on Saturday to abolish 14 local laws, including regulations on gambling, prostitution and pornography, prompting wild speculation that the island-province they call “China’s Hawaii” for its beautiful beaches was about to be transformed into “China’s Las Vegas,” where anything goes.

The government has since confirmed that the above vices remain illegal in Hainan — as they have been since it became a separate Chinese province in 1988 — and suggested those who allowed themselves to believe otherwise had displayed a “lack of legal common sense.”

The “abolition” was little more than an admin exercise for local lawmakers who are getting their ducks in a row, ensuring that regulations are consistent with the current national law, which supersedes all provincial law.

Rumors Won’t Die

China, of course, already has a “Las Vegas,” where gambling and prostitution are legal — Macau — although both are also legal in Hong Kong, to a lesser extent.

Gambling was already established in these territories when they seceded to China from Portugal and Great Britain, respectively, becoming special administrative regions of the People’s Republic that make their own laws.

This was even before a Bloomberg article of last year claimed that a party reform group headed by President Xi Jinping was examining the feasibility of permitting online gambling, a lottery, and sports betting in the province. After that, the long-term establishment of a land-based casino industry was a very real possibility, the sources added.

Ideologically Opposed  

But it seems the message became garbled in translation. Two months after the article’s publication, Beijing announced Hainan would become a free trade zone with expanded sports lotteries, of the kind that already exist on the mainland. Horse racing was also under consideration, but minus the betting, and there was definitely no mention of casinos, to which Beijing is fundamentally and ideologically opposed.

As well as increasing international tourism on the island, the government’s long-term goal is to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen and others into an integrated free-market-oriented powerhouse, in which Hainan will now play a part.

Morgan Stanley analysts were skeptical of the news from Hainan over the weekend, even before the clarification from the provincial government.

“We’ve been, and still are, of the view that Macau will remain as the only legalized casino jurisdiction in China for the foreseeable future,” they wrote in a note.