Attorney Shao Shiwei | Should Gambling Funds and Commissions Not Withdrawn from Gambling Websites Be Confiscated by the Court?

The reason for reflecting on this issue stems from a recent trial presided over by Attorney Shao involving the crime of operating a casino. Unexpectedly, the specific amount the defendant was required to disgorge became the focal point of intense debate among all parties during the trial (as for sentencing, after communications during the procuratorial stage, the potential prison term basically met our expectations).

As Attorney Shao has mentioned multiple times in previous articles, in criminal cases involving gambling, due to unclear legal provisions and the discretionary power held by judges,similar issues often result in different judgments in similar cases, which is the current judicial reality.

Some courts hold that even if the involved gambling funds and profits such as commissions have not been withdrawn, the agent still has control over the balance in their account. In other words, the court believes that even if the website is closed, can you guarantee that the website will not reopen someday? You have the right to withdraw funds, and even if you have not exercised this right, the relevant gambling funds and illegal gains should still be disgorged.

Cases holding this view include:

In Case No. (2019) Wan 0203 Xing Chu 29, the court held that “the rebate profits not withdrawn by each defendant due tobeing apprehendedor due tothe closure of the online platform，already existed in the accounts of each defendant, who had the power to control and use them;therefore, the number of unredeemed rebatesshould still be included in their profit calculations.””；

In Case No. (2022) E 0281 Xing Chu 700, the defendant argued that the agent commissions returned by the gambling platform had not been withdrawn. The court held that the agent commissions returned by the gambling platform had already been transferred into the personal accounts of each defendant on the platform, and whether they were withdrawn did not affect the determination of each defendant’s illegal gains.

Other courts hold that if the party has not withdrawn the involved gambling funds and profits such as commissions, there is no need to disgorge them.

Cases holding this view include: In Case No. (2021) Ji 0113 Xing Chu 168, the court held that the defense opinion of Defendant Pan X’s defender regarding Defendant Pan X’sunwithdrawndividends and rebates of XX yuan not being suitable for recognition as profit amounts... had factual and legal basis,and should be supported.。

For example, website operators, technical personnel, etc., who also participate in gambling as agents and obtain commissions from the website, regarding the question of whether unwithdrawn gambling funds or illegal gains should be refunded: since these individuals are internal personnel of the website, there is indeed a possibility that they may restore the website in the future. Judges consider that there is a certain objective basis for the possibility that these personnel may restore the website’s withdrawal function in the future and withdraw the account balances from the website.

However, as an agent of the website, the relationship with the gambling website itself is one of cooperation, not subordination. Unless it is a shareholder-level agent, where involvement in profit-sharing with the website may lead to closer contacts with internal website personnel, most agents do not know the core personnel of the gambling website and lack the ability and objective conditions to restore a website that has already been shut down by the police. In such circumstances,the agent has no possibility of withdrawing the balance in the account.

Suppose an agent, upon hearing that other agents have been arrested but before coercive measures are taken against themselves and while the website is still open, considers whether to withdraw their total gambling funds and illegal gains of 1 million yuan from the website? They might think that if theydo not withdraw the funds, could this be regarded as a good attitude of admitting guilt,striving for a lighter or mitigated punishment? But at this moment, if they somehow knew in advance that they would only be sentenced to six months, and if they did not withdraw the funds, the court would still require them to disgorge 1 million yuan, how would they decide?

The above hypothesis is actually adapted from a real case. The outcome was that this agent wanted to strive for good performance and did not withdraw the funds. Ultimately, the court ordered them to disgorge 1 million yuan. Later, the website was closed, and the balance could no longer be withdrawn,meaning the agent suffered a total loss of 2 million yuan.

If all cases were judged in this manner, I believe this would be equivalent toimplicitly encouraging those involved to quickly withdraw funds at the time the case arises?

If the amount is sufficiently large, then the partyis entirely likely to rapidly transfer assets before coercive measures are taken. The consequence of this would be to increase the difficulty of enforcement by the court after judgment,because in all probability, this money would become real estate or vehicles under other people’s names, or possibly become difficult-to-trace virtual currencies.

Furthermore, most balances on gambling websites are merely virtual points or cryptocurrencies, not Renminbi. In such circumstances,if the court directly calculates based on points or cryptocurrencies and requires the party to disgorge the corresponding virtual currency,there are significant issues regarding procedural legality.

In view of the above, this attorney believes that for gambling funds and illegal gains involved in the case that should be confiscated by court judgment,the determination should be based on the portion actually obtained by the party.Unwithdrawn balances in the websiteshould not be subject to recovery or confiscation.

From big data on judicial judgments, “non-withdrawal does not affect the determination of illegal gains” appears to be the mainstream judicial viewpoint. However, due to varying local circumstances and the discretionary power held by case-handling personnel, when it comes to individual cases, there is no such thing as a mainstream or non-mainstream view; every case has room for argument.

Therefore, when handling gambling-related cases,as defense counsel, one must not only focus on sentencing issues but also attach importance to defending against property penalties, thereby comprehensively protecting the legitimate rights and interests of the client.

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