Gambling Laws in China Explained 2024

China is among the countries associated with gambling worldwide. The Red Dragon is famous for creating games such as Pai GowKenoand Mah Jong. Yetprofitable and habitual wagering seems to be outlawed.

While Article 303 of the Criminal Law of the PRC bans unauthorized gamblingMacaoone of two regions in China where betting is legalmakes around $14.14 billion in revenue for 2023.

This blog post details aspects of China’s betting industryfrom betting forms to the do’s and don’tshighlighting how gambling laws in China can be explained in 2023.

Exploring The Legality of Gambling in China in 2023

Gambling is illegal in Mainland Chinabut this doesn’t stop the Chinese from partaking in the risky habit. Organizations like the Guangdong Club register abroad to circumvent this policy.

China’s black market has emerged as a venue for underground betting activities. An investigation by Chinese authorities discovered over $151 billion in illegal transactions during the pandemic.

On the other handHong Kong and Macau allow certain forms of betting. Both regions legalized gambling as influenced by their previous colonizers.

Macau is among the ranks of Las Vegas in gambling revenuewith a projected $23 billion revenue by 2024.

The following sections will explore betting-related policies in Mainland China and special regions to give you insights into how these highly impact the gambling scene in the country.

Gambling in Mainland China

Gambling has been part of Chinese history for over 3,000 years. Emperor Mencius was the first to express his disapproval of this behaviorand many dynasties tried to ban wagering but failed.

In 1949when the Communist Party entered powergambling of all forms was deemed illegal. Even opening casinos overseas to attract Chinese bettors was outlawed.

Howeverthe betting market in China is still thriving in earningsthanks to the state-authorized Lottery and illegal gambling.

Read on to learn more about the gambling industry in Mainland China.

State-Authorized Lotteries: Welfare and China Sports

While habitual gambling is illegal in Chinathe government hosts two types of Lotteries where people can partake: the Welfare Lottery and the China Sports Lottery.

The lotteries are the only known exemption to the gambling ban in Chinamainly because the government doesn’t consider these lotteries to be gambling.

Welfare Lottery

The Welfare Lottery commenced in 1987. It works like the typical Lottery universally played. Common versions of the Welfare Lottery are:

• Double Color Ball
• 3D Lottery
• Lucky 7

The government uses the revenues from the Welfare Lottery for projects dedicated to the elderlyvulnerableand disabled.

Sports Lottery

China launched the Sports Lottery in 1994. As its name explicitly sayssports betting allows the Chinese to bet on outcomes in international Football matches. It also offers traditional draws like:

• Super Lotto,
• Order of 3,
• Order of 5and
• Seven Star Lottery.

Since its launchSports Lottery has generated over CN¥1.4 trillion. The revenue allows for projects focused on sports. Part of the revenue goes to educationhealthcareand other social causes.

Black Market Gambling in Mainland China

Even with strict policies banning all forms of gambling in Mainland ChinaChinese people still find ways to gamble. Illegal gambling has become an industry by itselfgenerating millions of revenue.

Online gambling is one of the main culprits in illegal gambling. While efforts to track down online casinosthe rise of digital currencies paved the way for online gambling on the Mainland.

Efforts to Legalize Gambling in China

Despite the existing problem of illegal gambling in China and the growing revenue from Macau and Hong Kongthere seems to be no action from authorities to legalize gambling in the country.

No recent solid legislation and regulatory developments exist about allowing gambling in China. The authoritiesmainly the Ministry of Public Securityordered stricter enforcement against it.

🇲🇴 Macau: China’s Gambling Haven

Macau is known as the gambling capital of the world and the Las Vegas of the East. The Macao Portuguese government legalized gambling in the city in 1847. 

Macau’s Gambling Industry has been thriving for more than 30 decades. It is recognized as the city’s highest source of incomeaccounting for 50% of the economy.

In the first eight months of 2023Macau’s gross gaming revenue reached $14.14 billion (MOP114.01bn). 

Macau is the only part of China where gambling is openly legal.

During Q1 of 2023the Macau Government Tourism Office (MGTO) revealed that 6 of 10 visitors to casinos are from Mainland China30% are from Hong Kongand 10% are from Taiwan and other countries.

Explore the rich gambling scene in Macau with the facts and discussion below. 

Legalization of Gambling in Macau

Early forms of gambling in Macau date back to the 16th century when people from Mainland China immigrated to the city. Most were domestic helpersharbor workersand construction workers. 

In 1847the Portuguese Macau Government legalized gambling after claiming that betting shouldn’t be stripped from Chinese nationals with respect to traditional Chinese customs. 

At presentMacau is home to over 40 casinos. It has six licensed operatorswhich are as follows:

• Sands China
• SJM Holdings
• Wynn Macau
• Galaxy Entertainment Group
• MGM China Holdings
• Melco Crown Entertainment.

Macau’s Gaming Law 2022

The primary law that regulates Macau’s land-based gaming is the Gaming Law (Law 16/2001 amended by Law 7/2022)setting the legal framework for commercial operations focusing on “games of fortune.” 

The amended law restricts the number of gaming concessions to six and prohibits the creation of sub-concessions.

The law also states that the concession period is ten yearswith a possibility of a three-year exceptional extension.

Macau’s Gaming Law also increased the minimum share capital to $620 million from $25 millionand the minimum share capital held by the concessionaire’s managing director is 15% from 10%. 

Gambling-Related Laws in Macau

Some other land-based gaming laws in Macau are as follows:

Instant Lottery Law (Law 12/87/M)

This law governs the concession and operation of instant Lotteries. It defines “instant Lotteries” as those wherein prizes are either fully or partially fixed when the Lottery tickets are issued. 

Under this lawauthorities do not impose taxes on the tickets and prizes.

The Electronic Gaming Machines (EGMs) Regulation (Regulation 26/2012)

Under this ordinancethe Gaming Inspection and Coordination Bureau (DICJ) must approve the gaming machines. 

The law regulates electronic gaming machinessystemsand gaming equipment. The ordinance also sets the licensing procedures for EGM manufacturers and suppliers. 

Gaming Promoters’ Regulation (Regulation 6/2002)

Amended by Regulation 27/2009this law sets out the regulations and requirements for the licensure of gaming promoters’ operations. 

The Gaming Participation Law (Law 10/2012)

This ordinance regulates the conditions of entryworkingand gaming at casinos. It prohibits access to casino concessionaire’s employees when off duty. 

The law also raised the minimum age to enter casinos to 21. 

Legal Land-Based Gaming Forms in Macau

Four types of gaming products are legal in Macauwhich the Gaming Law establishes. These permitted gaming forms are as follows:

• Games of Chance – Macau defines games of chance as those that depend on the players’ luck. Casino games such as 3-Card BaccaratPokerCasino WarMahjongand Lucky Wheel qualify as games of chance.
• Interactive Games – These types are games of chance accessed through an electronic or mechanical gaming machine. The interactive games offer cash or other value as a prizewhere players participate in the game through telecommunication.
• Betting – Macau allows betting on Horse Racing. Players can also place bets on other sports like Football and Basketball.
• Lotteries – Raffles and lucky draws fall under this category. Lotteries allowed in Macau are in the form of Instant and Chinese lottery (Pacapio).

🇭🇰 Hong Kong’s 1977 Gambling Ordinance

Hong Kong enacted the Gambling Ordinance in 1977 to limit excessive gambling. The law states that gambling includes gamingbettingand bookmaking. 

The purpose of this legislation is not to outlaw gambling but to limit gambling opportunities and allow the establishment of controlled legal gambling outlets. 

Under the HK Gambling Ordinanceprivate bets and certain types of games carried out on private and licensed premises on social and non-social occasions are considered lawful.

Furtherthe ordinance gave the Hong Kong Jockey Club a monopoly on Horse RacingwagersFootball bettingand Lotteries. 

Gambling-Related Laws in Hong Kong

A region as strict as Hong Kong concerning regulating gambling activities is sure to implement multiple stringent gambling laws and ordinances. 

Aside from the Gambling Ordinancethe other issuances that regulate gambling in Hong Kong are as follows:

Betting Duty Ordinance

The law contains provisions for authorizing Lotteriescash-sweepsgambling on horse races and Football matchesand establishing the Betting and Lotteries Commission.

Chit-Fund Businesses (Prohibition) Ordinance

This ordinance enumerates provisions to prohibit chit-fund businesses and clearly describes it.

Amusement Game Centres Ordinance

This act lists provisions to regulate amusement game centers. Under this ordinancebettors must have an amusement game center license issued by the public officer authorized by the Secretary for Home and Youth Affairs.

Government Lotteries Ordinance

The ordinance authorizes and regulates the advertising and control of government Lotteries and related matters.

Broadcasting Ordinance

This law authorizes companies to offer broadcasting services and controls licensees’ provision of broadcasting services.

Legal Games in Hong Kong

Hong Kong’s Gambling Ordinance states that all gambling activities are illegal except those authorized by the governmentmainly Horse RacingFootball bettingand Mark Six Lottery.

• Horse Racing in Hong Kong – There are only two authorized racecourses in Hong Kongnamely Sha Tin Racecourse and Happy Valley Racecoursewhich can house up to 85,000 and 55,000 people. 
• Football Betting – Hong Kong authorized Football betting in 2003hoping to eliminate illegal gambling. Authorizing Football/Soccer wagers slowed the prevalence of unlawful sports bets in the countrybut only for a while. 
• Mark Six Lottery – The Hong Kong Jockey Club (HKJC) runs Hong Kong’s Lottery. The government introduced the game in 1975 to stop the illegal Chinese Lotteries operating then.

Illegal Gambling in Hong Kong

Having only Horse Racing to bet on has led to illegal sports betting in Hong Kong. In 2003the government added Football bettingbut it was only temporarily effective. 

It did not stop the people from partaking in illegal sports bets. HK officials determined that more than HK$500 billion ($63 billion) came from unlawful sports wagers during the 2014 World Cup.

Under the 1977 Gambling Ordinancethose who accept illegal bets will receive up to seven years imprisonment and pay a penalty of HK$5 million (more than $600k).

Under the same legislationresidents participating in illegal gambling will face imprisonment for up to nine months and a maximum penalty of HK$50,000 (over $6,000).

The Popularity of Offshore Betting in China

Chinese authorities outlaw offshore betting. The legal restrictions and lack of legal domestic options have led to the growth of online and overseas gambling sites that target Chinese nationals. 

Studies show that 80% of first-time Chinese travelers going overseas visit a casino. Nearly 340 casinos in Southeast Asia are designed to attract and accommodate Chinese gamblers.

China’s offshore betting entered the Philippines. In 2016one of the offshore betting trends recorded was proxy gamblingwhere ‘high rollers’ communicate with casino staff to place bets remotely.

Proxy gambling accounted for 40% of the Philippine’s $1 billion VIP-gaming market.

China’s Online Gambling Industry

China is considered the largest market for online gambling in the Asia Pacific Region. The Chinese government only allows limited online gambling activitiesnamely Lotteries and sports betting. 

In 2022China’s online gambling market size reached $9.9 billion. Analysts expect the market to grow by 7.3% or $16 billion in 2023-2028.

The rising popularity of online gamingincreased usage of smartphones and devicesand the growing awareness of cryptocurrency’s benefits drive the growth of China’s online gambling industry.

Furtherthe improvement of Chinese middle-class economic status that resulted in a growing desire for entertainment has increased the popularity of online gambling. 

The Philippine Offshore Gambling Operators Debacle

China’s offshore gambling peaked in 2020 in the Philippinesgenerating an estimated $122 million in revenue through the Philippine Offshore Gambling Operators (POGOs).

Howeverin 2019China’s Pres. Xi Jinping appealed to the PH government to shut down POGOs.

The crackdown was in response to the reports about inhumane crimes committed by Chinese nationals against their own. 

In September 2023the call for the immediate expulsion of POGOs in PH and the restriction of player entry was up for discussion in the PH Senate. 

Other PH officials also agree to shut down POGOsas these have spawned syndicates that threaten the safety of Chinese Nationals and Filipinos.

Legal Gambling Forms Available in China

The only government-authorized gambling activities in China are the Welfare Lottery and Sports Lottery. The Chinese government does not consider lotteries to be gambling. 

In 2020the State Councilor and Minister of Public Security emerged to advocate for Sports and Welfare Lotteries as China’s only legal form of betting.

In the first half of 2023China’s Ministry of Finance revealed that Lottery ticket sales reached $38.35 billiona 50.4% increase year-on-year.

Learn more about the Welfare and Sports Lotteries from the discussion below.

China’s Welfare Lottery

China’s Welfare Lottery started operations in 1987administered by the China Welfare Lottery Issuance Centre.

As its name goesa part of every ticket sale goes toward welfare projects in China. As of 2017more than 300,000 welfare and charitable projects benefited from the Welfare Lottery. 

The Chinese government allotted over $68 billion (500 billion CN¥) from the total sales of over $219 billion (1.6 trillion CN¥) for public welfare funds. 

During the first half of 2023the welfare Lottery tickets sold reached an estimated $12 billion (89.82 CN¥)a 20% increase year-on-year. 

China’s Sports Lottery

The Sports Lottery in China began issuing Lottery tickets in 1994. It allows legal sports betting in China and has recorded soccer as the most popular sport to place bets on.

Football Lottery4-selection correct scoreand Super Lotto are some of the Sports Lottery’s High-Frequency games. 

In the first half of 2023the Sports Lottery generated CN¥184.08 billiona 20% increase year-on-year. 

Betting Age Restriction in China

Gambling is a taboo in Mainland China. For the People’s Republic of Chinagambling is harmful to the betterment of society the way drugs and prostitution are.

Howeverin Macau and Hong Kongthe Lottery is not considered gambling and is only done in state-run establishments. To legally play in a state-run Lottery in Chinathe required age is 18 or 21.

To ensure everyone’s securityincluding the gambling facilitypassports and other forms of identification are thoroughly checked for foreigners who want to play in gambling facilities in China.

Gambling Penalties in China

China takes unlawful gambling seriously since it violates their moral standards. China imposes a fine of up to $70,000 to punish this immoral behavior and up to three years in prison.

Such is the case in 2021when ten individuals were fined a whopping $900,000 each for illegal gambling. The culprits used unauthorized state banks to claim their winnings from overseas betting platforms.

These ten culprits were just part of over 100,000 suspects charged with illegal gambling in 2021 – a 23% increase from 2020when 77,000 individuals were arrested for the same criminal offense.

The Zhang Jike Extortion and Gambling Scandal

Chinese Olympic gold medalist Zhang Jike made headlines in Chinese social media in 2023 mainly for his CN¥5 million gambling debt and extortion of his then-girlfriendJing Tian.

Although Zhang did not violate any gambling lawshis means to pay off his alleged gambling debt had the Chinese community and the big brands turn their backs on the Table Tennis player.

Reports claimed that Zhang leaked the sex tape of his ex-girlfriend to a loan shark named Mr. Swho used the info for extortion against Zhang’s partner in exchange for money equivalent or more to his debt.

Zhang’s team released a statement stating that this is fake news and will be pressing charges against the person or the netizens who spread this misinformation.

Final Thoughts

China has one of the strictest laws for gambling worldwide. Even though Lottery and sports betting are legal in the countrylegalizing gambling in the Mainland would still take a lot of time.

All the taxes they get from their state-run Lottery offices go to government projects that benefit the citizens. If this continuesChina sees no point in changing its laws against gambling.

Aside from benefiting already in Lotteriesfamilial and societal values play a critical role in why it’s hard to make gambling legal in Mainland China.