BUSINESS

China’s Taobao.com cracks down on prop bets disguised as ‘insurance’ policies

TAGs: China, taobao.com

taobao-prop-betting-insurance-policyVendors on China’s popular Taobao online marketplace have been told to stop offering ‘insurance’ policies that appear to violate the country’s gambling laws.

Earlier this week, the Chinese-language Legal Mirror quoted a Taobao spokesman saying the platform was “paying close attention to ensure imaginative ideas are not being improperly presented by sellers.”

These imaginative ideas included ‘insurance’ policies on intangible items, including how long it will be before breakup queen Taylor Swift breaks up with her current squeeze Tom Hiddleston, with payouts promised to customers whose ‘policies’ matched the eventual duration of the Swift-Hiddleston pairing.

Other vendors offered policies on similar celebrity questions, including whether certain singers would win a Grammy Award next year or whether certain television series would be renewed for another season … Basically, things you’d find in the novelty prop betting section of most online sportsbooks.

The price of these policies could be as low as a few cents or as high as RMB 300 (US $45). Winners would receive twice the cost of their policy, although there’s a lack of verifiable evidence that any Taobao user has ever successfully collected on any of these winning policies.

Even if these vendors were as honest as the day is long, there’s the slight problem that the only legal forms of gambling on the Chinese mainland are the state-run welfare and sports lotteries. There’s also the slight problem that China doesn’t allow private citizens to act as insurers.

A Taobao spokesperson told Sixth Tone that an investigation had determined that most of the insurers were seeking only “promotion of their own shops and haven’t harmed customers’ rights.” That said, the spokesperson said plans were afoot to install systems that will “automatically remove insurance products containing relevant keywords.”

This isn’t the first time that would-be prop bookies had attempted to use insurance as a cover. Two years ago, an actual Chinese insurance company offered “World Cup pity” policies that paid out small sums if a policy holder’s favorite team was eliminated during the 2014 FIFA event’s group stage. The policies were withdrawn after China’s insurance regulator voiced its displeasure.

One week ago, China’s WeChat mobile messaging service was forced to crack down on its users organizing informal betting pools using WeChat’s ‘hongbao’ peer-to-peer virtual credit exchange. Wonder if any Taobao vendors are currently offering policies on how long it will take WeChat users to figure out new ways to game the system.

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