China’s MPS Release ‘Notice Of Surrender’ For Cross -Border Gambling

On Friday, a joint ‘notice of surrender’ was released by China’s Ministry of Public Security (MPS), the Supreme People’s Court and the Supreme People’s Procuratorate to individuals engaging in ‘cross-border’ gambling (online or land-based).

The notice specifies that ‘the opportunity to rehabilitate and strive for leniency’ would be offered to all who come forward now on their own accord. According to law, suitably contrite offenders can receive a lighter or mitigated sentence, whereas those whose offences are’ relatively minor ‘may get off with only a warning.

Significant meritorious service

Those that come forward, would be obliged to ‘report or expose other criminal behaviour of others’ and ‘actively assist’ in catching other offenders. Such ‘significant meritorious service’ will be taken into account in the calculation of the acceptable penalty by the courts.

People who are not guilty of any gambling offenses but are aware of people engaging in such crime have been invited to fink on their families, recognising that the authorities can ‘protect the reporter’ from any reprisals by criminals who are unable to surrender.

A subsequent media briefing by members of all three government agencies made it clear that they were involved in apprehending “backers and investors of gaming groups outside China that solicit our people to gamble.’

Amendment of Criminal Law

Recently, the Chinese government amended the Criminal Law of the country to specifically criminalise establishing or operating casinos overseas, or those they appoint [who] organise and order [China] people to go abroad and engage in gambling. The new rules are scheduled to take effect on March 1.

Minor panic among China’s junket operators, which ferry high-rolling gamblers to casinos in Macau and other Asia-Pacific markets, has sparked a new legal reality. The vague wording of the amended law has caused much discussion as to whether Macau is included in the ‘abroad’ definition.

As Sands China President Wilfred Wong noted on the recent earnings call from casino operator Las Vegas Sands, the amended rules specifically say outside of the country, which is generally considered within the country, as you all appreciate, Hong Kong, Macau, and Taiwan  But then, by placing the word ‘offshore’ inside the bracket after outside the country, they leave uncertainty there.

Extension to blacklist

The blacklist of ‘cross-border gambling tourist destinations’ that was originally revealed last August was extended by China last week. The list of nations, however, has never been released, apparently with the intention of keeping casinos, junkets and mainland gamblers wondering about whether they are facing the increasingly long arm of the law in China.

As for the online gambling battle, the MPS declared on Thursday that in mid-December, the third round of its ongoing ‘Broken Card’ campaign against online gambling payment processing scored a big bust. The MPS reported that 531 offenders were arrested and 1.1m bank and phone cards were confiscated.

Thanks to operators offering at least 14 forms of online payment methods, China is estimated to have about 11 million people gambling online on any given day. These involve complex ‘fourth party’ schemes involving the issuance of fake invoices paid with ‘borrowed’ bank/phone cards, while with China-facing sites, the Tether stablecoin is also becoming increasingly common.