Online Gambling and Sports Betting in China

China is a country with a robust gambling history going back thousands of years. Whether it’s sports betting, national lotteries followed at home, or traveling to glittering casinos, the Chinese can be counted on to enthusiastically participate in games of chance. However, this national enthusiasm for gambling hasn’t been without its issues.

After an extended period of significant economic growth, China saw a decline in its fortunes. While economic experts have offered multiple explanations as to why two of the reasons for “capital flight” that President Xi Jinping has been zeroing in on are corruption and conspicuous consumption. And one cause of these ills, in particular, the government feels is gambling.

The city of Macau in southern China is now the world’s gambling mecca, doing seven times the business of its closest competitor, Las Vegas. It is the only community in mainland China where gambling is legal, due to its “special administrative status” as a former colony of Portugal. Prior to the start of China’s anti-corruption crackdown, casinos here earned tens of billions of dollars annually. Macau also enjoyed an unofficial reputation as a hub for moving money-especially money made gambling-offshore.

Because so many of Macau’s most frequent gamblers either worked for or were connected to the government in some way when investigations began many of these big, regular players dropped out of sight. Beginning in June of 2014, many of Macau’s casinos began to see huge drops in revenue, as much as 20% in some cases. No one thought that the Chinese had stopped gambling, but were traveling to other countries to do so. And right behind them? Chinese casino operators and developers who were alarmed by the government’s escalating gambling crackdowns.

As part of its anti-corruption endeavors in 2015, online gambling and sports betting were banned by the Chinese government. It also warned Macau casinos that they needed to start picturing a gambling city that didn’t gamble. Some of Macau’s newer casinos converted space meant for gambling to other forms of entertainment and theme parks. Non-Chinese casino developers became very nervous when eighteen foreign casino employees were arrested in a government “sting” operation. And watchers predicted that Macau’s high-roller days were done.

However, Lawrence Ho, CEO of Melco Resorts, and one of Macau’s biggest casino owners/developers says that the tide has appeared to have turned. Over the last ten months, Macau’s casinos have seen a dramatic reversal of fortunes. Ho thinks this return to local gambling is a response to the emotionally draining effect that two years of government crackdowns have had. And while the government has implemented tougher standards regarding gambling winnings and moving money around and out of China, Ho says he feels that gamblers have devised methods to work around these restrictions.

So while Macau will be in a “status renegotiating” situation in 2020, and he is looking towards opening casinos elsewhere in Asia, Ho says he isn’t concerned about the future of Chinese gambling. He feels that local gamblers will continue to enjoy their “vices” in Macau for many years to come.

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