Gambling industry in China
China is one of the largest economies in the world, the largest country in terms of population. The country is the second-largest gambling spending country in the world after the United States. In 2016, the Chinese spent about $60 billion on gambling, while the Americans spent about 120 billion.
At the same time, China could easily take first place. But the country’s government considers gambling an inevitable evil. And imposes on them truly draconian restrictions:
- Offline casinos in the country are banned
- Online gambling is forbidden
You want to spin a roulette or play poker? Go to Macau. The former Portuguese colony is the world’s largest gaming capital, overtaking both Las Vegas and Monte Carlo and all the other green spaces combined.
Only one type of gambling is allowed: lotteries. But all of them are strictly controlled by the state, the usual and even more so for foreign entrepreneurs entrance to this business is closed.
In addition to Macau, the Chinese can play for money in neighboring countries. For example, in the Philippines and Cambodia. Many foreign companies open casinos in these third-world countries only with a focus on the Chinese. This strains the Chinese government for two reasons. First, the money leaves the country. Second, the party is very concerned about the behavior of its members. Many officials are prone to embezzling public money and taking bribes. They like to spend money in casinos and restaurants. And if in Macau they can be identified with the help of government agents, it is a little more difficult to do so abroad.
Macau is a special administrative region of China in the south of the country, located on the opposite bank of the Pearl River Delta from Hong Kong. There are 38 casinos in Macau as of 2016. They are located in an area of 30 square kilometers, which is ten times less than Las Vegas. At the same time, Macau closes the gaming capital of the United States by revenue and income per player. Part of this money goes to foreign companies that operate in Macau.
Revenue per visitor in Macau, according to data for 2016, reaches $ 1300. In Las Vegas, the average visitor spends about $150. The difference is tenfold! This indicates not only the high income of Chinese visitors to Macau but also the level of their willingness to part with these incomes.
All gambling activities in Macau fall under the jurisdiction of the Game Inspection and Coordination Bureau (DICJ). The organization is responsible for enacting laws and overseeing the entire gambling industry.
Gambling industry exhibitions are regularly held in Macau. Also, the Chinese government is trying to make it another business hub. So even if the casino is completely shut down (and the government can do so), the region will not be left without money.
Any online gambling activity is strictly prohibited by law. Except, again, Macau. But even in this special area, the gambling site can only work if it has an “offline” version. Get access to these sites can only be in Macau. So we can safely say that there is no official online gambling in China.
Getting access to external sites is also difficult. The so-called “great Chinese firewall” successfully blocks any resources that the government does not want. If you have the idea of creating an online casino in Chinese, you know that you will simply lose money for development and marketing.
However, there is at least one known and popular loophole. These are mobile apps. The Chinese use the same mobile operating systems as the rest of the world. With iOS everything is not easy, legally place the casino in the App Store will not work. But Android allows you to install applications not only from Google Play but also from other stops.
Blocking data transfer by mobile application is much more difficult than blocking access to the site. This is what illegal (from the Chinese government) gambling service providers use. Even if it is possible to neutralize the work of one such application, it is quite easy to release an updated version that bypasses all blockages.
Such an application can be advertised in other (not necessarily gambling) applications. And also on YouTube, which is blocked by China only selectively. Any advertising of gambling on local sites, of course, is prohibited.
Thanks to this, the role of Chinese users in the global economy of online gambling is quite great. According to unconfirmed data, about 100 million Chinese people regularly use such applications. The average revenue for each casino is 13 dollars.
Legalization of gambling in China
So far, there are no prerequisites for legalization. If you allow casinos (including online) throughout the country, it can lead to several problems. First, the Chinese government fears that gambling revenues will allow provinces, especially those far from Beijing, to become more independent. This is a threat to the existing political system with a tight centralization.
Secondly, the government believes that gambling may hurt the minds and moods of the masses. In this regard, gambling is still compared to opium, which is associated with many black pages in the history of China.
On the other hand, the economic attractiveness of this market may sooner or later play a decisive role in the adoption of more loyal laws. There are no prerequisites for this yet. So all the money is still spinning in the illegal sector, which suits all parties: entrepreneurs, players and, apparently, the government.