China gives an ultimatum to gambling hosts

The Chinese authorities have issued a statement that by April 30, 2021, all gambling hosts working with citizens of the country must "surrender" or face serious consequences. This article will try to understand the real consequences of this ultimatum for the online poker industry.

China's fight against online poker

The Chinese authorities have been fighting against any form of illegal gambling for quite some time. Still, about 11 million people play across the Internet regularly. The Xinhua news agency estimates the annual volume of this market at $150 billion.

Online poker is one of the components of the formula. Local fans either use apps or classic poker sites (mainly the GGPoker Network). In recent years, the government has obtained the following results in this field:

In 2018, all poker apps were banned in China. Some of them closed their doors, some rebranded, and new ones were launched but abandoning the club system.
Since 2019, dozens of agents were arrested and sentenced to prison in the country and abroad (Vietnam, Malaysia, the Philippines, Macau).
In 2020 Bodog Asia closed due to "local restrictions."

What will change in China after April 30, 2021?

To further shield the country from illegal gambling, the National Congress passed amendments to the Criminal Code last year, increasing the punishment for facilitating the operation of foreign gambling providers up to 10 years in prison.

These amendments are due to come into force on March 1, but even before this deadline, the Ministry of Public Security, the Supreme People's Court, and the Procuratorate issued a joint statement:

Individuals involved in cross-border gambling have until April 30, 2021, to turn themselves into the Chinese courts.

Those who respond to such a call are promised lighter punishment, and those whose transgressions are "relatively minor" can get off with just a warning. Anyone who does not accept this offer will face severe and inevitable consequences.

Implications for online poker

This initiative entirely fits into the previous strategy of "tightening the screws" in a country with rich gaming history and many people gambling for real money.

The Ministry of Public Security can report on the tremendous success of its "Broken Card" campaign: last year, it led to the arrestment of 531 people for online payments related to gambling and more than a million bank accounts and phone cards seized, but the situation is likely to develop as follows:

The massive demand for online games in China cannot be broken by any punishments or prohibitions. New agents will replace old ones with new strategies to avoid being detected, and gambling hosts will work from places inaccessible to the authorities. Cryptocurrencies will become more popular. The costs and the level of secrecy will increase, but players willing to pay won't disappear.

Surely Chinese poker rooms will somehow react to this ultimatum, but the online gambling industry isn't going anywhere.

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