Attorney Shao Shiwei | Practice | Determination of Illegal Gains and Key Defense Points in Online Gambling Criminal Cases

Case No.: (2019) Zhe 03 Xing Zhong No. 1882

The company primarily generated profits from the gambling game project “Car Racing Hegemony.” Co-defendants’ confessions and witness testimonies stated that “the majority of recharge amounts were used for gambling” and “at least two-thirds of the amounts recharged by players were used for gambling in Car Racing Hegemony.” The court of second instance held that the first-instance court’s finding that member recharge amounts exceeded RMB 7.2 million and gambling funds exceeded RMB 3.6 million was consistent with the facts corroborated by the above evidence. This determination, being favorable to the defendant by adopting the lower-end assessment, was affirmed.

Case No.: (2014) E Zhongxiang Xing Chu Zi No. 00113

Regarding the defense counsel for Defendant Ai 1’s submission that, among the RMB 1.6 million in profits obtained,RMB 100,000 constituted income belonging to Ai 2,upon examination, based on the confessions of Defendants Ai 2 and Ai 1 in this case and verification against bank transaction records, it was confirmed that during the period when Defendant Ai 2 served as a betting line operator at Myanmar New Macau Entertainment Company, his income totaling RMB 100,000 was sequentially transferred by his brother, Defendant Ai 1, via bank transfers back to Zhongxiang for withdrawal;therefore, this amount shall be deducted.The defense opinion raised by his counsel is established, and this Court hereby confirms it.

Case No.: (2019) Chuan 0129 Xing Chu No. 348

The defendant exploited the feature in certain online games, such as [Game Name], whereby virtual game currency could be gifted or transferred between players. The defendant hired personnel to provide services for buying and selling game points to players of [Game Name] through methods such as distributing cards and publishing advertisements. The defendant profited from the price differential by purchasing game points (“cashing out”) at low prices and selling game points (“loading up”) at high prices.

In view of the existence of duplicate credits and circular transactions in the WeChat account income in this case, the total income amount shall be determined based on the cumulative cash-out amounts from the bank cards used for illegal transactions. By subtracting the total expenditure amount, the illegal proceeds in this case are determined to be RMB 435,266.59 (the cumulative cash-in amounts from seven bank cards specifically used for illegal transactions totaled RMB 3,326,102.82; the total income of the involved WeChat account was RMB 3,454,431.59; total expenditures were RMB 2,890,836.23; and the illegal proceeds amounted to RMB 435,266.59).

Case No.: (2020) E 0506 Xing Chu No. 21

The defense counsel argued that, in determining the amount of illicit proceeds to be recovered in this case, consideration should be given to the funds returned by the gambling operation to the participants; such amounts should be separately recovered by the public security organs and should be deducted when determining the defendant’s illegal gains. This argument is consistent with the facts of the case, and this Court accepts it.

Case No.: (2019) Zhe 0782 Xing Chu No. 101

Xue and others established a company and developed a mobile Mahjong application. The company promoted the app and expanded its brand awareness by recruiting agents and holding events. The recruited agents earned profits by selling room cards at one yuan per card, receiving commissions of 45%–50% on sales. The prosecution alleged that the company’s total profits from the sale of room cards amounted to more than RMB 1.7 million.

Defense counsel’s argument: Turnover is not equivalent to actual profit. Although the procuratorate alleged that the turnover in this case exceeded RMB 1.7 million, the fact remains that complimentary room cards were provided, and the quantity of room cards used solely for playing Mahjong (i.e., non-gambling activities) should also be deducted.

Case No.: (2020) Zhe 0103 Xing Chu No. 31

The court accepts the defense counsel’s submission that 20,000 diamonds remaining unredeemed on the gambling platform did not constitute actual receipt of profits and should therefore be deducted.