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Will Online Casinos Come to China?

Most of the news, commentary and speculation in the field of regulatory developments for the online gambling industry is currently centred on the changing landscape in the USA and the increasingly fierce war being waged as a result. However, there is another market that the online casino industry is watching with perhaps even greater expectation and hope – China.

Gambling, excluding a number of state-run activities such as lotteries, is illegal in Mainland China, despite the fact that card and dice games of chance and betting are deeply ingrained in Chinese culture. Although the huge casino scene in the Special Administrative Region of Macau is internationally famous, this is the only legal option for Chinese casino fans. And of course, travelling to Macau is not always, or for many ever, a practical option to indulge in casino gaming legally.

Despite being illegal, the online gambling industry in China is thought to be worth somewhere in the region of $15 billion. Chinese citizens illegally access offshore online casinos targeted at Chinese players with Chinese language and support. With mobile usage growing exponentially in China, there are more than 1 billion mobile users in the country, almost half of which have internet access via smartphones, it is becoming increasingly difficult for the government to effectively restrict online gaming activity by its citizens.

In light of the fact that the market is growing quickly and that currently the government or local companies see none of the income being generated, it can be assumed that it is only a matter of time before online gaming becomes somehow regulated and legalised in China. Many experts believe that this movement will begin to take place within the next year or two.

Indeed, many of the big established international online casino groups are already actively seeking to form relationships and communication with local groups and business interests. It can be assumed that if and when online casinos do become legal, foreign companies will only be able to enter the market in partnership with local operators. How accessible the Chinese market will be to foreign companies is hard to tell but local companies will undoubtedly have need of the experience that the big international players already have if they are to succeed in the frenzied competition which will undoubtedly follow any move to legalise online gambling in China.

International online casino and bookmaker Betsson’s Karl Rangeldst commented:

“Of course we, and the rest of the major players in the online gambling space, are keeping a close eye on developments in China. No-one needs to say how huge the market would potentially be and any serious online casino group would be remiss to not want to ensure they are in a position to make headway in China if the regulatory landscape there allows. We do have people who are actively keeping an eye on the situation there and putting down the foundations so ensure we are ready in the case of any changes in the laws governing gambling in China”.

Macau’s Best Casinos

Macau is famous for its casinos, pretty much the ‘raison detre’, of the special administrative region of China. Some of them are truly spectacular with Macau standing alongside Las Vegas as the world’s gambling capitals. Let’s take a look at some of the best for any of you who might be thinking of paying Hong Kong’s neighbour a visit.

Wynn Macau: Spectacularly posh

The Wynn Macau is the twin of the Las Vegas casino and has been loyal to the original Vegas Wynn’s red and beige colour scheme. As you might expect from one of the world’s most famous casinos, the Wynn Macau’s style treads the fine line between high class and spectacularly kitsch. On which side of the line it falls is probably down to personal taste, but a casino has to be given a bit more of a license when it comes to extravagance. The Wynn has all the classic casino table games and is famous for the predominance of high stakes games which attract the high roller set. Female dealers are also clearly ‘selectively’ chosen and prove to be quite the attraction.
The Wynn has two spectacular signature shows. One takes place hourly and consists of the impressive, if slightly comic, sight of a huge ‘Dragon of Fortune’, rising out of the casino’s rotunda to 10 metres or so up in the air, smoke billowing from its nostrils. It is made from gold leaf and adds a definite touch of grandiose bling. The ‘Tree of Prosperity’ is even busier, with the giant, you guessed it, golden tree rising into the air every 30 minutes.
If you are into shopping the Wynn also has a boutique shopping area with all the big fashion labels present from Gucci to Prada.

The Grand Lisboa

If The Wynn Macau treads the line between classy and tacky as best a huge casino can do, the Grand Lisboa is unashamedly a classic casino – a bit tacky. But, it’s still luxurious and blingy, rather than seedy. The Grand Lisboa doesn’t so much go in for shows and entertainment. It is pretty much a no-frills gambling experience. The casino is renowned as the top destination for poker and has the biggest, most say also the best, poker room in Asia. Most of the top Asian poker tournaments are held here and you can find the top Asian poker masters here on any given evening.

Legal Gambling in Mainland China

Although gambling is technically illegal in mainland China, outside of the semi-autonomous regions of Hong Kong and Macau, it can be said that paradoxically the country has the largest legal gambling industry in the world for any single country. Though casinos are illegal, outside of Hong Kong and Macau, there are many forms of state-approved and operated gambling. There is a popular lottery culture with the China Welfare Lottery having a number of different weekly draws as well as operating Happy 8, a keno game and PK Pickup, a virtual race game. There is also a Chinese Sports Lottery which offers sports betting on a number of popular sports such as football, baseball and basketball. Scratch cards and virtual lottery terminals which are basically slot machines also abound. The combination of these state run ‘lottery’ games which constitute the legal gambling options in the country actually account for more money than the casino industry in any other single nation.

The kind of games that most of us are probably familiar with from arcades, such as coin-pushing games where you pump coins into a machine in the hope that more will be pushed over the ledge as a result are also popular and can be considered as legal gambling. A game called ‘fishing master’, is also incredibly popular. Here coins are used to purchase upgrades to your fishing net and if you are a winner in your success in ‘catching fish’, in the course of them game you win points which you can ten cash out for money, potentially winning more than your initial outlay.

Gambling is deeply ingrained in Chinese culture with small money card games and dice games such as Mahjong taking place regularly all over the country amongst friends, family and colleagues. Most of these games are very low-stakes gambling but are technically illegal under regulations that outlaw all forms of gambling apart from the aforementioned state-run operations. However, the authorities and police are not interested in this kind of small-level social gambling, most probably indulging in it themselves.

Chinese citizens playing on online casinos is also something that, while strictly illegal, is not harshly enforced and efforts are not really made to prevent people from playing online real cash games, above the symbolic blocking of such sites. There are plenty of simple ways around this however such as using virtual proxy networks which are easy to set up. The Chinese authorities until now have not shown much inclination to crack down on such practises. The use of western social networks such as Facebook is more seriously frowned upon than a little illicit online casino play.

A history of gambling in Macau: Part 2

By the 1960s and 1970s over a million Chinese a year were travelling to Macau to gamble. Although the majority were from Guangdong, which borders Macau, they would come from all over China and to legally gamble. Hundreds of thousands, if not millions, would also travel the short distance from Hong Kong in the pursuit of the thrills on offer in their neighbour’s casinos. Casino tourists also flocked in from the rest of Asia, particularly from Japan, Thailand, South Korea and India. In 1999, Macau, after almost 450 years under Portuguese administration, was transferred back to China.

There were some benefits to Chinese rule of Macau. Although the region has independence to decide most government matters locally, the Chinese military was sent in to clean up the triad gangs which were prevalent in the region. With a large part of the organised crime that had been plaguing Macau flushed out and sent packing, casino revenues increased by 42%. The original monopoly license also came to an end soon after in 2001 and competition was opened up with concessions granted to some of the world’s biggest casino groups to begin operating in Macau. As well as upmarket casinos operated by the likes of MGM, Wynn and Sands and Crown, other gambling activities such as racing and sports betting were introduced. The casinos alone, of which there are currently 35 in Macau, created net earnings of almost 250 billion renminbi in 2012.

Over 28 million gambling tourists travelled to Macau in 2012, almost 17 million of which came from Mainland China. With China still not having any legal mainland casinos Macau is the destination of choice for those wishing to play casino games legally. It will be interesting to see whether in the future the Chinese government will seek to preserve Macau’s status as the country’s casino oasis or whether the growingly lenient, at least when it comes to making money, Chinese administration begin to legalise casino operations in Mainland China. The chances are that Macau would survive such a move. There are plenty of casinos around the USA, but that hasn’t diminished Las Vegas’ draw as a casino Mecca with a special status. Having so many high class casinos in one small area does have its advantages as far as tourists are concerned so Macau probably doesn’t have to worry about its near 500 year casino and gambling heritage coming to an end any time soon.