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The most recent bust in China’s illicit gambling crackdown saw the authorities target the popular Chinese social media WeChat app that was being used to facilitate illegal bets. WeChat is a subsidiary of Tencent Holdings.
Chinese authorities have ramped up their crackdown on illegal gambling activities a few weeks before the FIFA World Cup began and their crackdown resulted in a number of busts spread across the provinces of Sichuan, Jiangsu, Yunnan, Hunan, Guizhou, Zhejiang and Shenzhen. The majority of these illegal gambling rackets were found to be running on social media platforms, chiefly on the two most prominent ones: WeChat and QQ, the latter also owned by Tencent Holdings. So far, Tencent, which is based in Shenzhen, has dodged inquiries on the illegal gambling epidemic that propagated on their social media services.
Under the Guise of Gifts
The traditional Chinese red gift envelope called “hong bao” (sometimes pronounced “ang pao”, a small, thin envelope or packet designed to package money or some other small item) has been increasingly digitalized with the advancement in technology. The first of these digital gift envelopes were pioneered by the platform Weibo in early 2011, in celebration of the Lunar New Year. Many other social media platforms followed suit soon after, such as DingTalk by Alibaba and QQ by Tencent.
Illegal gambling operators came up with a way of leveraging this tradition by taking it digital andused it for bribery as well as the remittance of illicit funds under the guise of gifts. According to the Investigation and Supervision Department of People’s Procuratorate of Shenzhen, the reason these social-media based wager games attract so many gamblers is because of the incredibly low cost of entry when compared to official gambling outlets or even illegal gambling dens.
Crime Finds A Way
The common saying “Life finds a way” seems to apply to illicit online gambling as well, as users of WeChat and other platforms were quick to develop creative ways to use the digital hong bao for gambling.
A common game is drawing lots by grabbing hong bao filled with a random amount of money. The last three digits of the amount stored in the hong bao will be added up as points, and the player with the most points wins the game (for example, if you grab a hong bao filled with 15.77 Yuan, you’ll get 5+7+7=19 points). The winner of that wager wins a certain amount of money equivalent to the points, as set by the operators of the game.
The gambling rings have grown so expansive that bots were employed to keep up with the demand of computing points and winnings. The recent crackdown will send a strong message to illegal digital gambling operators and Chinese citizens who secretly gamble via WeChat.
