Advantages and Disadvantages of Four Methods for Determining the Amount: Bet Amount, Winnings, Initial Deposit, and Settlement Amount
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 reprints, legal consultations, or business exchanges, please add: sswls66
According to legal provisions, organizing gambling involving three or more persons, where the cumulative amount of gambling funds reaches RMB 50,000 or more, constitutes the crime of gambling; in cases of opening a casino, where the cumulative amount of gambling funds reaches RMB 300,000 or more, it constitutes the circumstance of "serious circumstances" for the crime of opening a casino (punishable by fixed-term imprisonment of 5 to 10 years).
For online gambling activities, due to the absence of temporal and spatial constraints, gambling activities on a larger scale can be conducted within a shorter time, across a wider scope, and among more participants, making it easy to exceed the aforementioned monetary thresholds.
In cases involving the crime of opening a casino, if the evidence on record determines that the amount of gambling funds involved for the party has reached the standard for "serious circumstances," but the calculation method involves double counting, or the basis for calculation clearly does not align with objective reality, and the defender's relevant defense arguments are supported, then, in accordance with the principle that doubts should be resolved in favor of the defendant,it may be presumed that the circumstances involved for the party have not reached the level of "serious circumstances," thereby arguing that the party should be sentenced to less than five years of imprisonment.
Therefore,defense arguments regarding the amount of gambling funds hold significant importance in gambling-related criminal cases.
For example, in the case of Hua involving the crime of opening a casino, shared by Attorney Shao in the article "Can the Bet Amount Be Directly Recognized as the Amount of Gambling Funds in Online Gambling Criminal Cases?", although the Procuratorate determined that Hua's cumulative bet amount was RMB 2 million, belonging to the "serious circumstances" of the crime of opening a casino, the court held that based on the evidence on record, it could be inferred that there were issues of double counting in the bet amount, and ultimately sentenced Hua to one year of fixed-term imprisonment.
However, in judicial practice, there is no uniform standard for determining the amount of gambling funds involved. Depending on the objective circumstances of each case, each determination method presents certain issues. In particular, the concealed nature and anti-investigation characteristics of online gambling criminal activities increase the difficulty for judicial authorities to collect evidence, leading to a situation where the final determined amount of gambling funds involved may differ significantly from the actual situation. This, in turn, will have a substantial impact on the conviction and sentencing of the parties involved.
Author | Attorney Shao Shiwei
01
Relevant Legal Provisions Regarding the "Amount of Gambling Funds" in Online Gambling Crimes
Combining the following legal provisions and judicial practice, we can summarize that in online gambling crimes, the methods for determining the amount of gambling funds can be broadly categorized into four types: bet amount, winnings, initial deposit, and settlement amount.
Bet Amount: refers to the amount wagered by gamblers when participating in gambling.
The relevant legal basis is: the amount may be determined by multiplying the points wagered or won on the computer network by the actual monetary value represented by each point; for the crime of opening a casino committed via the internet, the amount of gambling funds may be determined based on the bet amount in the accounts actually controlled by the perpetrator of opening the casino, in conjunction with other evidence; if statistics are unavailable, it may be determined based on the actual funds used for gambling by the participants whose participation has been verified.
Winnings: refers to the amount actually won by gamblers.
The relevant legal basis is: the amount of gambling funds may be determined by multiplying the points wagered or won on the computer network by the actual monetary value represented by each point;
Initial Deposit: refers to the amount initially deposited by gamblers.
The relevant legal basis is: where funds are exchanged for virtual assets, etc., the amount of gambling funds shall be determined based on the amount of funds required to purchase such virtual items or the amount of funds actually paid;
Settlement Amount：In online gambling models that do not require pre-deposits, gamblers use the initial virtual credits in their online gambling accounts to participate in gambling, and settle funds with their upstream agents according to a certain time cycle and based on win/loss outcomes. In such cases, the final settlement amount may also serve as the basis for determining the amount of gambling funds.
2005 Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Gambling
Article 8: Money and property used as stakes in gambling crimes, money and property exchanged for chips, and money and property won through gambling belong to gambling funds. Forgambling crimes committed via computer networks, the amount of gambling funds may be determined by multiplying the points wagered or won on the computer network by the actual monetary value represented by each point.
2020 Notice of the Supreme People's Court, the Supreme People's Procuratorate, and the Ministry of Public Security on Issuing the "Opinions on Several Issues Concerning the Handling of Cross-Border Gambling Criminal Cases"
V. On the Determination and Handling of the Amount of Gambling Funds in Cross-Border Gambling Criminal Cases
For the crime of opening a casino committed via the internet, the amount of gambling funds may be determined based on the bet amount in the accounts actually controlled by the perpetrator of opening the casino,in conjunction with other evidence; if statistics are unavailable, it may be determined based onverifiedactual funds used for gambling by the participants.
For funds directly or indirectly exchanged for virtual assets such as virtual assets and game props, which are then used as chips for betting, the amount of gambling funds shall be determined based on the amount of funds required to purchase such virtual items or the amount of funds actually paid.
For funds in bank accounts primarily used for receiving and circulating gambling funds in the crime of opening a casino, if the suspect or defendant cannot explain the lawful source thereof, such funds may be recognized as gambling funds.
02
Four Types of Gambling Fund Determination Methods and Their Issues
1. Understanding at a Glance: What Are Initial Deposit, Bet Amount, and Winnings
A organizes B, C, D, and E (four persons) to gamble. Each person's initial principal is RMB 50,000. Each round is played with an "ALL IN" strategy. The fund status after five rounds is shown in the figure (for ease of explanation, this example does not consider the rake amount taken by A):
[Initial Deposit] In offline gambling, regardless of the amount invested in each round or the win/loss outcomes, the total initial principal is only RMB 200,000, which remains fixed.
However, for online gambling conducted over the internet, different calculation methods apply:
[Bet Amount]
Based on the initial bet points, the amount of gambling funds involved for A is RMB 200,000.
Based on the cumulative bet points, the amount of gambling funds involved for A is RMB 1,000,000 (29+25+25+21=100).
[Winnings]
Based on the points won, the amount of gambling funds involved for A is RMB 100,000.
2. Pros and Cons of Different Determination Methods
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Initial Deposit:
From the perspective of accurately calculating the actual gambling funds, it is certainly more reasonable to determine the amount of gambling funds involved for A's conviction and sentencing based on the initial deposit amount of each gambler. However, in the case of online gambling, the evidence collection work by handling authorities is constrained by objective conditions, making practical implementation not so straightforward. Therefore, in situations where the initial deposit amounts of gamblers on gambling websites cannot be accurately statistically determined, other statistical methods are employed.
Furthermore, even if statistics are based on the initial deposit, it is not absolutely fair. For example, virtual asset exchanges have spot trading and contract trading modules. Currently, there is no controversy that perpetual contracts are recognized as opening a casino. If handling authorities recognize the entire amount deposited by all platform users in the exchange as gambling funds, without excluding the amounts deposited by users in other modules that do not constitute opening a casino, this is clearly unreasonable.
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Bet Amount：
In online gambling criminal cases, the biggest issue with statistically determining gambling funds based on the bet amount is: should the amount of gambling funds be cumulatively calculated for gamblers' repeated betting behaviors? "The bet amount is derived from double counting due to repeated betting" is a common defense argument raised by defenders.
In situations where gamblers repeatedly bet on a website, using the cumulative bet amount to calculate gambling funds does not reflect the true betting situation of the gamblers. For example: Gambler A and Gambler B (corresponding to Agent A1 and Agent B1 who accept their bets) both have an initial bet amount of RMB 50,000. Gambler A has good skills and wins every round. After several rounds of repeated betting, the cumulative amount reaches as high as RMB 500,000. Gambler B lacks skills, loses their entire principal, and stops betting, with no repeated betting. If Agent A1's accepted bet amount is determined to be RMB 500,000, and Agent B1's accepted bet amount is RMB 50,000, then A1 will be sentenced to more than 5 years, while B1 will be sentenced to less than 5 years. This is clearly extremely unfair.
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Winnings:
When the initial deposit and bet amount cannot be statistically determined, winnings are also one of the methods for calculating gambling funds. However, calculating gambling funds based on winnings also presents different determination methods. For example, an agent accepts bets from Gambler A. A participates in 5 rounds of gambling. In the first 4 rounds, A wins a total of RMB 300,000, and loses RMB 100,000 in the 5th round. If calculated based on A's actual winnings, it is RMB 200,000 (30-10=20); if based on the winnings displayed for A on the gambling website, it is RMB 300,000 (cumulative win of RMB 300,000 over 4 rounds). If the agent's accepted bet amount is calculated based on the winnings displayed on the gambling website, RMB 300,000 reaches the sentencing standard for the second tier of "serious circumstances" for the crime of opening a casino. If calculated based on A's actual winnings of RMB 200,000, it still falls within the first tier of sentencing for the crime of opening a casino, which is less than five years.
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Settlement Amount:
Apart from the pre-deposit model, agents on some gambling websites can provide gamblers with virtual credits, and then settle based on the final win/loss amount. In this model, since there is no actual principal invested, gambling funds cannot be statistically determined using the aforementioned methods such as bet amount or initial deposit. Therefore, in judicial practice, the settlement amount is also one of the methods for calculating the amount of gambling funds.(It is particularly noted here that in the aforementioned case of Hua involving the crime of opening a casino, even though Hua accepted gamblers' bets based on virtual credits, and neither Hua nor the gamblers had actually delivered gambling funds before being apprehended, the court still determined that Hua constituted the crime of opening a casino.)
For example, in gambling within WeChat groups, judicial authorities may determine the amount of gambling funds based on the difference between inflows and outflows. However, due to the repeated betting nature of online gambling, the continuous cycle of "gambler deposits – casino gambling – casino rebates – gambler withdraws – gambler deposits" possesses strong immediacy. Therefore, the settlement amount calculated broadly as inflows minus outflows may not truly and objectively reflect the actual amount of gambling funds.
03
Concluding Remarks
Through the above analysis, we can see that since each method for determining gambling funds has its shortcomings, as defense attorneys, we should raise various unreasonable aspects of the calculation basis for the amount of gambling funds evidenced by judicial authorities in individual cases (such as special audit reports), advocate for the principle that doubts should be resolved in favor of the defendant, and strive fully to secure lighter or mitigated punishments for the parties involved.
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