Defense Strategy: Serious Circumstances + Accessory Offender = Sentence of Less Than Five Years
Special Disclaimer: This article is an original work by Attorney Shao Shiwei. It represents only the personal views of the author and does not constitute legal consultation or legal advice on specific matters. For article reposting, legal consultation, or business exchanges, please add: sswls66
According to Article 303 of the Criminal Law, the statutory penalties for the crime of operating a casino are divided into two tiers: less than five years, and five to ten years (for serious circumstances). According to judicial interpretations, acting as an agent for a gambling website by accepting bets, or by recruiting players, members, or downlines, and participating in the website’s profit sharing, also constitutes the crime of operating a casino.
Unlike offline gambling, online gambling can accumulate substantial capital flows within a short period, easily exceeding the threshold for “serious circumstances” in the crime of operating a casino, resulting in a starting sentence of five years.
Under legal provisions, accessory offenders shall be given a lighter or mitigated punishment, or be exempted from punishment. Therefore, if a party has recruited players for a gambling website and received commissions, service fees, etc.,striving for classification as an accessory offender is of significant importance.。
However,whether the act of recruiting players and downlines should be classified as that of a principal or an accessory offender? Currently, laws and relevant judicial interpretations do not provide a very clear definition. In this regard, Attorney Shao previously wrote “Introducing Guests to Online Gambling Platforms for Rebates: Do Courts Rule Differently?”, which discussed the phenomenon of “different judgments for similar cases” among courts in various jurisdictions of Xinyang, Henan Province, in the “Jiuzhou Entertainment City” series of cases.
This article will further refine the discussion on the determination of principal versus accessory offenders regarding the act of agents recruiting players and downlines.
Author | Attorney Shao Shiwei
01
Classification of Agents Recruiting Players, Members, and Downlines for Gambling Websites
By reviewing the relevant provisions of China’s Criminal Law, the 2010 “Opinions on Several Issues Concerning the Application of Law in Handling Cases of Online Gambling Crimes” (hereinafter referred to as the “2010 Opinions”), and the 2020 “Opinions on Several Issues Concerning the Handling of Cross-Border Gambling Crime Cases” (hereinafter referred to as the “2020 Opinions”), the acts of agents recruiting players, members, and downlines for gambling websites can be divided into four types:
1. “Bet-Accepting” Agents
The 2010 Opinions stipulate that if a suspect’s account on a gambling website has subordinate accounts, they shall be identified as an agent of the gambling website. The conditions for determining that an agent constitutes the crime of operating a casino are “acting as an agent + accepting bets.” If subordinate agents accept bets, it constitutes “serious circumstances.”
2010 “Opinions on Several Issues Concerning the Application of Law in Handling Cases of Online Gambling Crimes”
I. Standards for Conviction and Sentencing in the Crime of Operating Online Casinos
Paragraph 1: Using the internet, mobile communication terminals, etc., to transmit gambling videos or data and organize gambling activities, where any of the following circumstances exist, shall be considered acts of “operating a casino”:
(3) Acting as an agent for a gambling website and accepting bets;
Paragraph 2: Implementing the acts specified in the preceding paragraph, where any of the following circumstances exist, shall be deemed “serious circumstances”:
(6) Recruiting subordinate agents for a gambling website, whereby the subordinate agents accept bets;
III. Determination of the Number of Gamblers, Amount of Gambling Funds, and Website Agents in Online Gambling Crimes: Where there is evidence proving that a suspect’s account on a gambling website has subordinate accounts, they shall be identified as an agent of the gambling website.
2. “Non-Bet-Accepting” Agents
The 2010 Opinions stipulate that the condition for determining that an agent constitutes the crime of operating a casino is “acting as an agent + accepting bets”. So, if an agent does not accept bets, can they still constitute the crime of operating a casino? This has been a subject of controversy in practice. The 2020 Opinions provided a clear answer to this issue. According to the understanding and application of the 2020 “Opinions on Several Issues Concerning the Handling of Cross-Border Gambling Crime Cases,”regardless of whether the agent accepts bets, because they provide direct and significant assistance to the criminal act of operating a casino, they should be recognized asan accomplice to the crime of operating a casino.
Furthermore, although the 2020 Opinions concern cross-border online gambling cases, the author believes that even for recruiting gamblers for domestic gambling websites, the content of the Opinions can be applied by reference.
2020 “Opinions on Several Issues Concerning the Handling of Cross-Border Gambling Crime Cases”
III. Determination of Joint Crimes in Cross-Border Gambling
(3) Knowing that it is a gambling website or application, if any of the following circumstances exist, they shall be treated as an accomplice to the crime of operating a casino:
2. Acting as an agent for a gambling website or application and recruiting players, members, or downlines.
Understanding and Application of the 2020 “Opinions on Several Issues Concerning the Handling of Cross-Border Gambling Crime Cases”
The “Online Gambling Opinions” and their interpretation state that “acting as an agent for a gambling website and accepting bets” constitutes the act of operating a casino; if one merely acts as an agent for a gambling website but does not accept bets, it does not constitute the act of operating a casino. However, courts across various regions have generally reported that with the rapid development of electronic payments, many defendants currently act as agents for gambling websites, solely responsible for organizing and soliciting customers, no longer directly accepting bets from gamblers, but instead having gamblers place bets directly with the online gambling platform via electronic payments. The original provisions no longer meet the practical needs of combating online gambling crimes. We believe that regardless of whether bets are accepted, as long as one acts as an agent for a gambling website or application and recruits players, members, or downlines, it constitutes an act of organizing and soliciting gamblers under the direction of the casino, providing direct and significant assistance to the criminal act of operating a casino, and should be recognized as an accomplice to the crime of operating a casino. Therefore, the “Opinions” include “acting as an agent for a gambling website and recruiting players, members, or downlines” in the provisions concerning accomplices.
3. “Profit-Sharing” Agents
Strictly speaking, participating in the profit sharing of a gambling website should refer to shareholder dividends and should not be regarded as agency. However, in judicial practice, as long as the actor introduces members to the website and receives commissions/service fees, it is extremely common for criminal judgments to describe this act as “acting as an agent for a gambling website and recruiting members, obtaining profit shares.” Therefore, “profit-sharing” agents are also a type of online gambling agent in judicial practice, divided into two categories in practice: one is shareholder-level agents (registering shareholder-level accounts to enjoy shareholder dividends), and the other is similar to the aforementioned “non-bet-accepting” agents (merely recruiting players and downlines for the online gambling platform, thereby being determined by the court as “participating in the gambling website’s profit sharing”).
2010 “Opinions on Several Issues Concerning the Application of Law in Handling Cases of Online Gambling Crimes”
I. Standards for Conviction and Sentencing in the Crime of Operating Online Casinos
Paragraph 1: Using the internet, mobile communication terminals, etc., to transmit gambling videos or data and organize gambling activities, where any of the following circumstances exist, shall be considered acts of “operating a casino”:
(4) Participating in the profit sharing of a gambling website.
Paragraph 2: Implementing the acts specified in the preceding paragraph, where any of the following circumstances exist, shall be deemed “serious circumstances”:
(5) Participating in the profit sharing of a gambling website, with illegal gains amounting to more than RMB 30,000;
4. “Gou Tui” (Promoter) Agents
“Gou Tui” is an abbreviation for promotional salespersons in the online gambling industry, or marketing personnel. In practice, most “Gou Tui” are deceived into going to places like the Philippines and Cambodia, where they are forced to engage in telecom fraud for gambling websites. Their specific job duties involve following instructions from superiors, creating female personas, adding people in various gambling groups, gaining their trust, and inadvertently revealing the gambling website to them, guiding them to play. If users place bets, they receive commissions.
Although “Gou Tui” and the three types of agents mentioned above all recruit players for gambling websites, they differ in many aspects. For example: the main job of “Gou Tui” is to recruit individuals and encourage guests to place bets; their salary may be fixed or settled based on a certain percentage; “Gou Tui” have no control over the gamblers’ accounts.
2010 “Opinions on Several Issues Concerning the Application of Law in Handling Cases of Online Gambling Crimes”
II. Determination and Punishment of Joint Crimes in Online Casino Operations
Paragraph 1: Knowing that it is a gambling website, providing the following services or assistance shall constitute joint crime in the crime of operating a casino: providing internet access, server hosting, network storage space, communication transmission channels, advertising placement, member recruitment, software development, technical support, and other services to gambling websites, where the service fees collected amount to more than RMB 20,000;
Paragraph 2: Implementing the acts specified in the preceding paragraph, where the quantity or amount reaches five times the standard specified in the preceding paragraph, shall be deemed “serious circumstances.”
02
Determination of Principal and Accessory Offenders in Acts of Recruiting Players, Members, and Downlines for Gambling Websites
1. Determination of Principal and Accessory Offenders for “Bet-Accepting” Agents
Based on the above, we can conclude that whether or not bets are accepted does not affect the determination of agent status. Agents are divided into bet-accepting, non-bet-accepting, and profit-sharing agents. So, as accomplices in the crime of operating a casino, should agents be classified as principal or accessory offenders?
In the case of Hua et al.’s retrial for the crime of operating a casino[i] mentioned in the article “In Online Gambling Crime Cases, Can the Bet Amount Be Directly Recognized as the Gambling Fund Amount?”, we used a diagram to describe the hierarchical relationship of agents in that case.
In that case, Hong[ii], Hou 1, Hou 2, and Hua were all casino agents. Hong, Hou 1, and Hou 2 were sentenced under the second tier of penalties for serious circumstances in the crime of operating a casino, while Hua was sentenced under the first tier.
Therefore, whether an agent is classified as a principal or accessory offender depends on the role the agent played in the specific case.
Key Point: “The Role Played”means examining the agent’s role in the overall operation of the casino, focusing more on factors such as the number of members recruited, the amount of profits taken from the house, the amount of bets placed by members, and the number of subordinate agents recruited. As forwhether the agent actually profited and how much, these are not the primary considerations directly influencing judicial organs in classifying the agent as a principal or accessory offender.
For example, in Case No. (2021) Yue 03 Xing Zhong 1768, although the court acknowledged that “it cannot be ruled out that Chen was employed by others and had another boss,” and according to Chen’s confession, he onlyprofited RMB 50,000, the court held that Chen acted as an agent for a gambling website and accepted bets, playing a significant managerial role,thus constituting a principal offender.。
Another example is Case No. (2022) Yue 02 Xing Zhong 223, where Ye served as an agent for a gambling website, recruiting more than 70 downline members, with downline members’ gambling amounts nearing RMB 3 million. Yeprofited RMB 150,000. However, considering that Ye played a secondary role in the joint crime, the court classified him as anaccessory offender.。
2. Determination of Principal and Accessory Offenders for “Non-Bet-Accepting” Agents
The determination of principal versus accessory offenders for this type of agent similarly depends on the agent’srole in the specific caseplayed. It is not necessarily classified as either a principal or accessory offender.
For example, in Case No. (2022) Yue 01 Xing Zhong 1337, Geng acted as an agent for a gambling website and recruited players and downlines. Although he claimed he should be classified as an accessory offender, the court of second instance held that evidence in the case confirmed Geng served as a gambling website agent recruiting downlines and players for three years(long duration), promoted to a total of more than 600 people(large number of people), and illegally profited over RMB 1 million(significant profit), indicating that his status and role in the joint crime of operating a casino were both significant. The original judgment classifying him as a principal offender was lawful and well-founded.
3. Determination of Principal and Accessory Offenders for “Profit-Sharing” Agents
“Profit-sharing” agents (shareholder-level agents) are not necessarily always classified as principal offenders. For example, in Case No. (2020) Hei 0903 Xing Chu 100, the court held that Shi invested in an online casino and participated in profit sharing, constituting the crime of operating a casino with serious circumstances. However, the court also considered Shi a minor shareholder of the casino and ultimately classified him as an accessory offender.
The other type of “profit-sharing” agent, similar to “non-bet-accepting” agents, follows the same principles for determining principal versus accessory offenders, so further elaboration is omitted.
4. Determination of Principal and Accessory Offenders for “Gou Tui” (Promoter) Agents
“Gou Tui” are also divided into bosses andworkers. If a “Gou Tui” is employed by a boss, receives a fixed salary, and acts as an employee, they are generally classified as an accessory offender. If a “Gou Tui” has become proficient in promotional business, resigns to start their own company, build a team, recruit employees, and cooperate with gambling websites to conduct online promotion for the website, due to their considerable independence, they are generally classified as principal offenders.
03
Conclusion
Through the detailed exposition in this article, a conclusion can be drawn regarding the question: “Should agents who recruit players and downlines for gambling websites be classified as principal or accessory offenders?”:
The determination of principal versus accessory offenders requires consideration of factors such as the duration of the actor’s participation, the number of subordinate agents and gamblers recruited, the amount of bets accepted, the magnitude of personal profit, whether organizational and managerial responsibilities were undertaken, whether there was participation in the website’s profit sharing, and the level of the agent’s hierarchy. Therefore, a comprehensive assessment and determination must be made in each specific case.
As defense counsel, when there is no dispute that the case is characterized as the crime of operating a casino, striving for the classification of the agent as an accessory offender and advocating for a lighter sentence is the optimal defense strategy.
[i] (2016) Hu Xing Zai No. 2
[ii] (2014) Song Xing Chu Zi No. 2054
Recommended Reading
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