China To Reward Finks And Penalise Operators

Amid the COVID-19 pandemic, China is threatening to seriously hit online gambling operators, while at the same time giving big financial rewards to those who fink on operators.

Chinese Public Security Ministry released a six-point ‘Notice on Strictly Combating Cross-Border Gambling and Telecommunications Network Fraud During the New Crown Pneumonia Epidemic,’ Thursday.

The notice claims that online operators based outside the country “increased their gambling efforts against our citizens” during the pandemic, making the damage caused “more prominent” and forcing the Ministry to take additional steps to “safeguard our economic and social order.”

The latest steps fundamentally mimic a notification given by the ministry six weeks ago. The previous notice called for the establishment of a “blacklist system for participating in gambling and employees and overseas tourist destination,” as well as improving methods for identifying and cutting off electronic payment processing for gambling.

However, new wrinkle includes encouraging people to “actively disclose and reveal similar illegal and criminal activities.” Should “clues” given by Chinese citizens “play an important role in destroying the dens of the mega-crime and eliminating the gangs of the mega-crime, the public security organ will give a heavy award and protect the personal information and safety of the whistleblower.”

On the flip side, failure to disclose illegal gambling activity, or to provide any assistance allowing gambling operators to conceal their operations, would bring down the full wrath of the Ministry on those whose lips remain sealed.

Wang Xiaohong, vice minister of the ministry, chaired a special meeting on Friday to support the intensified crackdown. Among the goals of this initiative was to “speed up the construction of online reporting platforms,” indicating the government was preparing dedicated digital finking outlets through which whistleblowers would be able to send their tips.

China UnionPay published its 2019 Internet Payment Protection Survey earlier this month, saying the average China Mobile user had made slightly more than three digital transactions a day. Slightly more than half (51%) of users said they had ‘run online scams,’ a 16-point decline from the 2018 study, while those who actually experienced harm from such scams dropped 26 to 23%.

The survey added that online gamblers had the highest rate of fraud among those users who had experienced harm from sketchy online actors, and also registered the highest proportion of ‘large losses’ to the fraudsters.

Local residents also use virtual private networks (VPN) to bypass China’s great firewall but China is working on a solution to this workaround. The Ministry of Industry and Information Technology, Huawei and China Unicom and China Telecom have jointly suggested replacing the current TCP / IP protocol on the internet with something called ‘New IP.’

New IP reportedly involves a ‘killswitch’ algorithm that would enable a central part of the network to disconnect data that arrives at or originates from a specific internet address. New IPs will also allow new Internet addresses to be registered and authenticated, potentially removing any chance of online anonymity.