China busts two major illegal online gambling operations


china-bust-online-gambling-operationsChina has broken up two major online gambling rings, including one that utilized trademarks associated with legitimate Macau casino operators.

On Sunday, state-run media outlet Xinhua reported that police in Jiangsu province had arrested over 50 suspects connected to a “transnational” online gambling ring that handled turnover of around RMB7.8b (US$1.1b) in the past two years from around 114k customers, netting the ringleaders some RMB650m in profit.

Police said the Philippines-based gambling site – which operated under the Diyi (Emperor) Entertainment brand – first appeared on their radar in January 2016 following a tipoff from an irate customer. repored that the customer, who’d lost over RMB150k ($21,900) in one week, had been introduced to the site by a friend in an internet café at a local shopping mall.

Police subsequently determined that the site’s average daily turnover was around RMB10m, while the ring relied on a network of 27 agents, who in turn utilized around 5,700 sub-agents to recruit customers and enable money movement. The scale of the operation was sufficiently vast that the feared Ministry of Public Security took over coordiantion of the investigation.

In spring 2017, police arrested two of the site’s technicians upon their return to Shanghai, and the cooperation of these two suspects gave police an inside look at the gambling ring’s operations. In March 2018, four of the main suspects, who’d fled to Thailand once they realized they’d been rumbled, returned to China to face the music. To date, some 56 suspects connected to the case have been arrested.

Meanwhile, Xinhua filed a report on Monday regarding a separate bust in Jiangsu of what police called a “family-style” criminal gang that operated five gambling sites. Some 63 suspects have been arrested following an investigation that began in March 2017 following another customer tipoff.

The gang reportedly set up their websites – which utilized known Macau casino operators’ trademarks, including New Lisboa Casino (SJM Holdings) and Venetian (Sands China) – from a private residence in Laos’ capital city Vientiane. Police claim the operation was worth some RMB500m, and the enforcement action resulted in the seizure of RMB12.7m in cash and 10 real estate properties.

For years, SJM and Sands have been forced to issue public alerts that they don’t operate any online gambling sites. Sands has even sued some of these brand-poachers, although the company has yet to collect on any of the default judgments they’ve been awarded.