At the beginning of the year, the figure of 600 billion yuan (US$72.5 billion) shocked the country.
This was the amount of money that flew overseas through gambling annually. It is 15 times the overall volume of welfare and sports lotteries in 2003, and equal to the total revenue from tourism in 2004, according to Peking University's China Public Lottery Research Institution.
An anti-gambling campaign launched nationwide in January resulted in 23 big cases supervised by the Ministry of Public Security, 13 of which were Internet-related cases in Beijing, Shanghai, Liaoning, Jiangsu, Fujian, Guangdong, Jilin and Guizhou.
On January 20, Beijing police said that half of 10 gambling cases they cracked in the campaign were involved with online soccer gambling.
Till March 3, over 317 Internet gambling cases, involving 1,137 people, were solved. Sixty-eight people were arrested, 250 are in custody, 123 bailed for trial, 62 reeducated through labor and 250 punished, said sources from the National Anti-Gambling Coordinating Team. The money involved totaled over 1.7 billion yuan (US$205 million).
However, insiders say that the estimated total is a little conservative, since domestic agents only get a small proportion of gambling funds, while much is remitted overseas through illegal financial channels like underground banks. The amount lost every year is uncountable.
Companies eye the Chinese market
In 2000, online gambling started to penetrate China, first appearing in provincial capitals and big- and middle-sized cities where the economy and Internet were comparatively developed. Soccer gambling quickly became the most dominant form.
"Not all overseas gambling websites regarded China as a potential market at first," said Xu Yong, an official from the coordinating team, "However, after some websites reaped huge profits, the rest shifted their attention to China one after another. Chinese websites also followed suit."
In two to three years, the numbers of gambling websites, bankers, agents and members all sharply increased. Gamblers not familiar with the Internet could bet via phone, short message and fax, and many who neither knew nor liked soccer could hire other people to gamble for them.
After May 2003, the "sword campaign" was started to target Chinese who were gambling overseas. It forbade leading Party and government officials, civil servants and senior executives of state-owned enterprises and public service units from going overseas for gambling and achieved positive results.
To get around new restrictions, some hired overseas agents via the Internet to gamble by "remote control" from China.
New challenges for law enforcement
Agents at different levels of online gambling firms don't usually meet other agents and members in person, so a high level of secrecy is maintained. They use virtual hosts for their advertisements and change websites and domains continually. Once they go offline or switch off their computers much evidence gets lost, so police have to catch suspects while the latter were betting online.
The coordinating team disclosed that the Ministry of Public Security, together with telecom companies and the China Banking Regulatory Commission, will strengthen supervision of online gambling information and forbid any capital transfer to the accounts of gambling websites through credit cards or banks.
A special judicial appraisal center on digital data will be set up to improve judicial awareness of the kinds of evidence used in online gambling cases.
Public security departments nationwide now have more experience in targeting suspects, ascertaining the channels used to transfer gambling funds, recognizing the relationship between upper and lower agents and acquiring digital evidence.
"The penalty for online gambling should be strengthened," said Jing Di, preliminary judge in the high profile Fu Xiangrong case.
According to Article 303 of the Criminal Law, any person who aims to profit from collective gambling, establish gambling houses or take gambling up as a profession will be liable to a maximum of three years in prison and fines, even if their crimes involve hundreds of millions of yuan.
"Such penalties don't match the amounts," said Xu Chenglei from the coordinating team, "Online gambling and the tremendous profits involved weren't foreseen when the legislation was made."
The coordinating team hopes that legislators can amend the Criminal Law and solve what they see as a legal bottleneck.
(China.org.cn by Tang Fuchun, March 22, 2005)
