Does Soliciting Foreign Gamblers for Overseas Websites Constitute a Criminal Offense?
Special Disclaimer: This article is an original work by Attorney Shao Shiwei. It reflects only the author’s personal views and does not constitute legal consultation or legal advice on any specific matter. For article reprints, legal consultations, or business exchanges, please add: sswls66
In 2020, the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security jointly issued the Opinions on Several Issues Concerning the Handling of Cross-Border Gambling Criminal Cases. These Opinions were issued against the backdrop of the increasingly prominent problem of overseas casinos and online gambling syndicates soliciting and attracting Chinese citizens to gamble. Accordingly, the Opinions set forth explicit provisions regarding scenarios in which overseas casinos solicit Chinese companies to participate in gambling abroad.
On March 1, 2021, the Amendments (XI) to the Criminal Law of the People’s Republic of China came into effect, introducing the offense of organizing participation in domestic or overseas gambling. This amendment criminalizes the act of organizing Chinese citizens to participate in gambling within China or abroad.
However, the aforementioned provisions primarily address the criminal liability for overseas gambling websites that attract domestic gamblers (regardless of whether the individuals involved are physically located within China or abroad, Chinese criminal law retains jurisdiction). The question then arises: if the individuals involved (such as technical staff, agents, or other collaborators with online gambling platforms) are located within China and, via online methods, solicit foreign gamblers to gamble on gambling websites (with servers hosted overseas), do such individuals constitute the offense of operating a casino?
Author | Attorney Shao Shiwei
01
Practical Scenarios
Gambling-related websites can be broadly categorized into two types: one is betting websites, and the other appears to be gaming platforms (such as blockchain games, GameFi, fishing games, Texas Hold'em, sports events, etc.), but are essentially gambling-related games. Since gambling-related crimes have always been a key area of crackdown by Chinese judicial authorities, website operators generally host their servers overseas and recruit technical, operational, promotional, and other cooperative personnel within China. According to legal provisions, agents of gambling websites who solicit domestic gamblers to engage in gambling constitute joint offenders in the crime of operating a casino, which is undisputed in practice.
However, if an agent located within China solicits foreign gamblers to gamble on overseas gambling websites, this model appears not to infringe upon relevant legal interests protected under Chinese law (the website is hosted overseas, the gamblers are foreigners, and the gambling funds consist of foreign currencies held overseas). Against this backdrop, domestic entities associated with gambling websites may consider whether they can collaborate with such gambling websites. For example:
- Software development and technical service companies may ask: Can we help operators develop such gambling-related software?
- Third-party operation companies may ask: Can we provide overseas operational services for such platforms?
- Headhunting firms may ask: Can we recruit domestic staff for such platforms?
- One might wonder whether it is possible to solicit customers for such a website and earn commissions or service fees.
02
Seeking Answers from a Case Study
Since 2010, a South Korean national, Hong, operated an online gambling website and established multiple gambling studios within the territory of China. He leveraged various sporting events to recruit South Korean nationals to place bets on the website. Zhang (a South Korean national), the person in charge of the Weihai branch of the gambling website’s studio, recruited Chinese employees to operate computers and provide services over the internet for the gambling website, including customer service management, accepting bets, and processing withdrawals. Zhang also directed the allocation of gambling funds and the disbursement of employee wages in accordance with Hong’s instructions. Pei was responsible for leasing office and accommodation premises, as well as procuring and maintaining computers. Pei also provided multiple bank accounts under his own and his family members’ names within China to facilitate the transfer and payment of funds for the gambling website. The court ultimately held[i] that the conduct of Zhang and Pei constituted the crime of opening a casino. Both played principal roles in the joint criminal enterprise and were deemed principal offenders, and thus should be punished based on their participation in the entirety of the criminal activities.
[Analysis]
Based on this case, we briefly analyze two points:
1. Why does China have jurisdiction over this case?
2. Why did the conduct of Zhang, Pei, and others constitute a criminal offense?
The court reasoned that although the servers of the gambling website were located outside China and most of the individuals involved were foreign nationals, the establishment of studios within China to engage in cross-border gambling activities, with the participation of Chinese citizens (providing services such as customer service management, accepting bets, and processing withdrawals), disrupted public order and social management. These activities had a direct connection with China or Chinese citizens and caused actual harm or impact. Therefore, Chinese courts have jurisdiction over this case.
According to reports, more than 30 individuals[ii] were involved in the case. In addition to Zhang and Pei, other personnel from the studio were apprehended, including members of the customer service team who provided consultation and answers to gamblers; the information verification team, which was responsible for verifying gambler information and promptly identifying risks such as law enforcement sting operations; and the odds team, which adjusted the website’s odds based on major sporting events to enhance the website’s profitability.
In short, the judicial authorities determined that each suspect in this case, knowing that others were operating an online casino, still provided assistance. Therefore, their respective conducts collectively constituted joint criminal liability for the crime of opening a casino.
03
Further Reflections
Although the aforementioned case did not explicitly mention whether any casino agents were involved, we can draw analogical reasoning based on the adjudicative logic applied by the court in this case:Where a domestic agent solicits foreign gamblers for a website, does such conduct constitute the crime of operating a casino?Short answer: Yes, it does.
The role played by the agent is to recruit more gamblers for the website, thereby inducing more individuals to increase their betting amounts on the gambling website, so that the agent can obtain substantial commissions and service fees. Such conduct, like the activities undertaken by personnel in the aforementioned gambling website studios, constitutes “providing assistance while knowingly aware that another person is operating an online casino.” As can be seen from the provisions below, developing players, members, or downlines for gambling websites, as well as providing technical support, fund settlement, advertising placement, and other services, are all treated as accomplices to the crime of operating a casino.
Given that, in the aforementioned case, Zhang, who hired and managed studio employees, and Pei, who provided fund settlement services and office space, were both deemed to have committed joint crimes, it follows that agents who develop players for the website likewise constitute accomplices to the crime of operating a casino.
2020 Opinions on Several Issues Concerning the Handling of Cross-Border Gambling Criminal Cases, III. Determination of Joint Crimes in Cross-Border Gambling ... (2) Where one knowingly provides venue, technical support, funds, fund settlement, or other services to another person committing the crime of operating a casino, such person shall be treated as an accomplice to the crime of operating a casino. (3) Where one knowingly deals with gambling websites or applications, any of the following circumstances shall be treated as an accomplice to the crime of operating a casino: 1. Providing software development, technical support, internet access, server hosting, network storage space, communication transmission channels, advertising placement, member development, fund payment and settlement, or other services to gambling websites or applications; 2. Serving as an agent for gambling websites or applications and developing players, members, or downlines.
04
Summary
At the end of this article, we summarize the question: Does recruiting agents for gambling websites constitute a criminal offense?
- Where the agent is within the territory and solicits foreign nationals for the website, such conduct constitutes the crime of operating a casino;
- Where the agent is outside the territory and solicits gamblers within the territory of China for the website, such conduct constitutes the crime of operating a casino;
- Where the agent is outside the territory and solicits foreign gamblers for the website, does such conduct constitute the crime of operating a casino? This lawyer believes that this depends on whether the website holds relevant licenses locally, whether it operates lawfully, and whether local laws permit foreign nationals to recruit agents for domestic websites, among other factors; each case must be analyzed on its specific facts.
[i] (2022) Lu 10 Xing Zhong No. 46
[ii] The gambling funds involved amounted to more than RMB 3 billion.
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