BUSINESS

‘Cloud purchase’ sites allow China’s masses to skirt online lottery ban

TAGs: China, cloud purchase sites

China’s gambling masses have found yet another inventive way to circumvent their government’s restrictions, although the authorities are likely already readying their ban-hammer.

'Cloud purchase' sites allow China's masses to skirt online lottery banThe latest pseudo-gambling phenomenon to take China’s netizens by storm is the rise of so-called ‘cloud purchase’ websites and apps. At their core, they resemble a traditional online marketplace, except the goods up for sale aren’t really for sale. Instead, users buy the equivalent of raffle tickets that offer a chance at winning anything from an iPhone to a Mercedes Benz.

The cost for a ticket can be as low as RMB 1 (US 15¢) but, like any raffle, the likelihood of holding the randomly selected winning number depends on how many other people are vying for the prize.

Some users try to boost their odds of winning by purchasing ever greater number of tickets. The low cost of entry lulls some users into buying massive amounts of tickets, including one Guangzhou tech worker who claims to have spent RMB 160k ($27k) in six days before he snapped out of it.

Last month, a division of China’s General Chamber of Commerce estimated that there were around 400 cloud purchase sites currently in operation. Even online giant NetEase has gotten into the game.

Chinese media outlet SixthTone quoted a government representative discussing one cloud purchase site, noting that the license application process didn’t involve asking “whether the company intended to be an online casino.” The rep said there would be a “full investigation” if a sufficient number of consumers came forward with complaints.

Some users have voiced suspicions that certain cloud purchase accounts win too many prizes too often. The founder of one site denied there were any ghost accounts or faked wins, while admitting that there was no way to verify the randomness of winning numbers.

A representative of the Professional Committee of Media Shopping said the cloud purchase sites “effectively operate as lotteries, but without the necessary business licenses.” The Committee urged the state to take action against such sites.

Mainland Chinese gamblers have only two legal gambling options in the state-run welfare and sports lotteries but all online lottery sales have been suspended for nearly 16 months now.

Cloud purchase is but the latest method of circumventing China’s online gambling restrictions. Previous dodges have involved celebrity prop wagers disguised as ‘insurance policies’ on online marketplace Taobao.com and informal betting pools using the WeChat messaging service’s hongbao money exchange feature.

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