With more than 1.3 billion potential customers and strict gaming laws, China is the forbidden fruit of online gambling. The law forbids online casinos from accepting Chinese players, but the market has proven too tempting for operators to abide. Those factors plus a large appetite for gambling among the populace have made China an unintentional powerhouse in online gambling.
The best online casinos for Chinese players have a thorough understanding of the market and work to make themselves as accessible to players as possible. These efforts include Chinese language websites, deposit methods that work well with yuan and traditional games that are recognizable to locals.
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It is important to note that Chinese online casinos are not regulated by the government at all. In contrast, the government actively works to make online gambling inaccessible to the common citizen. Government efforts in stamping out unlicensed gaming sites have been largely unsuccessful, and people continue to play online in large numbers to this day.
As is the case in many countries, gambling occupies an awkward position in China. On the one hand, the Chinese people are profound gamblers. Some estimates have valued the underground gambling industry to be north of 3.9 trillion yuan ($600 billion). On the other hand, the government attempts to prevent all gambling outside the state-sponsored lottery, casinos in Macau, and certain betting options offered in Hong Kong.
Chinese casino sites are likewise prohibited by the law, if not in practice. The government prohibition of online gambling has proven difficult to enforce given the borderless nature of the internet. Online casinos located in other countries where online gambling is legal happily accept customers from the Chinese mainland.
Casino Law in China
While mainland China is hostile to casinos, Hong Kong and Macau do have their share of retail gambling options. Nowhere in China is online gambling legal or regulated, but the law also does not target players. The laws that forbid online casinos in China are directed at the industry, with penalties reserved for those who operate unlicensed casinos.
Operating any form of underground gambling is a risky business in China, but international websites have shown no fear to date. The best Chinese casino sites are all headquartered in other countries and remain untouchable by our domestic legal system.
It is unclear how the law actually impacts normal, everyday citizens who simply gamble online for fun. While it is possible one could be fined for playing at an online casino, we know of not one case in which an individual has been charged as a player. Authorities routinely crackdown on underground gambling rings and those who operate unauthorized casino sites, but the players appear to be relatively safe for the time being.
A 2016 report on the popularity of underground sports betting seems to reinforce the theory that authorities are focused on organizers of gambling rather than participants. Applications such as WeChat said they were taking measures to stop individual users from placing sports bets by limiting suspicious accounts and disabling money-sending capabilities for certain users. While annoying, those measures are a far cry from actual criminal activity.
Things are a bit different in Macau as it operates semi-autonomously from the Chinese mainland. There, brick-and-mortar casinos are doing big business. At its height, the Macau gambling industry exceeded $45 billion to make it 7 times larger than the Las Vegas gambling industry. But even in Macau, there is no regulation of online gambling.
Hong Kong likewise has a few gambling options that are not available on the mainland. In Hong Kong, all gambling is illegal except for activities specifically authorized by the government under the Betting Duty Ordinance. These authorized forms of gambling include bets offered by the Hong Kong Jockey Club (horse racing betting), the Mark Six Lottery, and football betting (also offered by the Hong Kong Jockey Club).
Authorities in Hong Kong note that illegal sports betting remains a major industry in Hong Kong as well. International websites offer not only convenience but are also subject to lower taxes and can offer punters better odds and more value for their money. The Hong Kong Jockey Club has estimated that local gamblers lose roughly HK$12 billion a year betting on sports online.
Back on the mainland, the government utilizes the Great Firewall to block access to Chinese casino sites. This effort has made life somewhat difficult for international operators, but operators have become adept at changing their website domains and developing workarounds for people living behind the Great Firewall.
Sports and Welfare Lotteries
China strictly regulates gambling on the mainland with just two types of gambling that are explicitly and unquestionably legal. These are the Welfare Lottery and the Sports Lottery. Both are state-owned entities that funnel their funds back to national coffers for various charities and the development of sports.
Between the two lotteries, annual sales regularly exceed 300 billion yuan and result in raising large sums of money for social security programs, welfare, and sports across China. The lottery was first established in 1987 as a simple weekly drawing game but has since expanded to include high-frequency games, scratch cards, video lottery terminals, sports betting, and virtual sports betting.
The sports lottery is popular across China, but many estimates have concluded that illegal sports betting revenues dwarf the official sports lottery. The sports lottery resembles traditional sports betting in every respect except in one key area: the odds as offered by the sports lottery are poor for players. People looking to be paid more for their picks (and have a realistic chance at coming out ahead) are turning to local bookies and online betting sites.
China flirted with online gambling in the past with a trial period during which certain lottery retailers were allowed to offer lottery games online. Accusations of widespread corruption led authorities to shut down all online lottery sales in 2015, but there are reports that China is considering reinstating online sales of lottery products.