Is gambling online illegal in China?

Background to Gambling in China

China has a long history of gambling. In fact, one of the most widespread forms of gambling is Keno, invented in China about 3,000 years ago as a state-run game designed to raise funds for constructing the Great Wall and to build armies. Keno is now played in the form of a lottery in nearly every country worldwide.

This is not the only Chinese gambling game to spread worldwide. Mah Jong, the Chinese tile game, is internationally famous. Another example is Pai Gow, a game that gained huge popularity when it was adapted in America to be played with a standard deck of cards instead of traditional tiles.

Today, gambling is a £3.6bn industry in China – but these are official statistics only, because despite gambling being a socially acceptable activity, it is not a legally accepted one. In fact, the only legal form of gambling you'll find in China today is the original one – Keno.

Gambling Legislation in China

Under the Communist Party, gambling is illegal in mainland China. In fact, it is technically illegal in all of China, but it is overlooked in the administration of Macau. There the practise thrives, with many large casinos offering every Western style of gambling there is, from poker to slots.

This results in many Chinese people taking gambling holidays to visit the Macau Casinos, but because of the size of the country this can be a journey of up to five hours. Nevertheless, this remained the state of things until the advent of online gaming in the 1990s.

Because certain gambling games are steeped in Chinese culture, you can often find gambling action in small environments. Chinese authorities often overlook games of Mah Jong or Pai Gow provided they're played in private or not publicly advertised. In 2005 the Chinese government instituted a sweeping crackdown on illegal gambling, but issued a statement reassuring ordinary citizens that they would not be prosecuted for "friendly" games.

Officially, the Chinese blanket ban on all forms of online gambling was implemented to protect its citizens. When the legal Chinese lottery was available online, several unscrupulous scam sites sprang up and bilked people out of the price of their lotto tickets. To play the Chinese lottery, you now have to buy a ticket from a store like everyone else.

Current State of Legislation in China

While gambling over the Internet remains completely illegal, there has been growing indications that new legislation may soon legitimise the practise.

The reasons behind this are most likely financial. As China's industry continues to boom, the average Chinese citizen has increasing amounts of disposable income, and while gambling used to be the preserve of elite businessmen, it's clear that ordinary people are taking their money to casinos in increasing numbers. Furthermore, statistics indicate that many Chinese are gambling illegally at existing online casinos.

New legislation would not only allow regulation of existing play but it would also allow Chinese companies to launch and run casinos, opening themselves up to the growing international market for online gaming. Being able to tax that revenue stream would provide significant public funds, and keep Chinese money inside the country.