China Reports Increase in Gambling Operators Targeting Citizens Despite Global Industry Shutdown

China’s Ministry of Public Security claims it has noticed increased activity by foreign casinos and online gaming sites to recruit Chinese citizens for gambling during the coronavirus pandemic.

In a public address late last week, the ministry described cross-border gambling that targeted its citizens as crimes that “seriously injure the public s lawful rights and interests and seriously impact health, economic, and social development.”

Anyone found committing such crimes would be “strictly punished,” it said. Meanwhile the public is encouraged to report their suspicions to authorities for “major rewards,” should information lead to conviction.

The claim that offenses have increased since the coronavirus crisis is, on the face of it, surprising.

Until recently, most online gaming operators focused on the Chinese market were based in the Philippines and Cambodia.

But Cambodia’s authoritarian government bowed to pressure from its biggest economic influencer late last year and dismantled its online gaming sector.

The Philippines chose to from Beijing, but closed its licensed online gaming industry – along with its land-based casinos – on March 15, as it sent its main island, Luzon, into coronavirus lockdown.

Of course, black market operators can theoretically target China from anywhere, and even that are licensed and regulated in Europe engage with the Chinese market, although they don’t like to talk about it.

These operators may be ramping up their Chinese marketing to exploit the vacuum left by Cambodia and the Philippines, as they face headwinds domestically.

Meanwhile, most land-based casinos in the region have also closed. Before its casinos were shuttered, the Philippines used to do a brisk trade in proxy betting, where agents in land-based casino VIP rooms would place bets over the phone on behalf of high-rolling Chinese clients.

The Tigre de Crystal in the Primorsky Krai special economic zone in Russia’s far east was a likely beneficiary from the temporary shutdown of gaming in Macau, and the travel restrictions that remained in place for Chinese mainlanders afterwards.

The Russian casino lies close to China’s north-eastern border, and Chinese visitation would have been boosted by its new major shareholder. Macau’s biggest junket operator, Suncity, acquired a 25 percent stake in the operation last year.

Tellingly, having claimed to have largely stamped out domestic transmission of COVID-19, China announced this week that almost all new cases have been imported by Chinese nationals returning from Russia’s far east.

But Tigre de Crystal was also forced to close at the end of March, as Russia stepped up its fight against the coronavirus.

There may be a handful of casinos still serving Chinese citizens in and Myanmar. But these alone could hardly be responsible for the Ministry of Public Security’s jitters, which may have to remain a mystery.