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ASEAN – China’s Gaming Fix

by new_c_admin

While at first glance the news that China has asked the Philippines to ban online gambling may seem like just another sign of its growing involvement in the region, a quick scan of regional newspapers soon makes it obvious that the Asian superpower needs all the help it can get to battle its own gambling problem.

Gambling is illegal in China, except in Macau, and gambling businesses are increasingly targeting the mainland China market by opening up shop in Southeast Asia. Eager Chinese punters are now flocking to online gambling sites across ASEAN, and Beijing is worried about capital outflow and money laundering.

On Tuesday, China’s foreign ministry spokesman Geng Shuang called online gambling “the most dangerous tumour in modern society.”

With accounts linked to online payment platforms, gamblers can play typical casino games like poker, roulette and slot machines in the vast and unregulated expanse that is cyberspace.

Allowing bets as low as 10 yuan (US$1.40), online gambling is especially appealing to lower-income Chinese who may not have the means to go to Macau or other places overseas where they can legally gamble – with the Philippines and Cambodia emerging as hubs to cater to this demand from mainland China.

Seemingly not satisfied with the Philippines’ recent decision to stop issuing new online gambling licenses, Geng said on Tuesday that “we hope the Philippines will go further and ban all online gambling.” 

‘I think they like gambling’

There are 60 licensed Philippine Offshore Gaming Operators (POGOs) in the Philippines and the industry is a lucrative revenue source for the government. 

Eager to downplay China’s concerns, the Philippine Amusement and Gaming Corporation (Pagcor) said that no Chinese firms operate POGOs in the Philippines, POGOs do not stream in countries that have outlawed online gambling, and – interestingly – not all Chinese gamblers are from China.

“I think, in their culture, they like gambling. But it’s not automatic that if the players are Chinese, they are all from China. The players are mostly Chinese, but we are not sure if in fact, they are all from China,” Victor Padilla, senior manager of Pagcor’s policy and offshore gaming licensing division told Philippines media on Friday.

The question of whether these gamblers are from China or not has not stopped the rest of ASEAN from clamping down hard on online gambling.

Headache across ASEAN

Last Sunday, Cambodia’s Prime Minister Hun Sen announced the country would ban online gambling by next August as it was used by foreign criminals “to cheat and extort money from victims, domestic and abroad, which affect the security, public order and social order.” 

Cambodia relies heavily on China for aid and investment, with the transformation of its fishing town of Sihanoukville into a hub of hotels and casinos regularly cited as an example of Chinese development in the country.

In July, Vietnamese police detained more than 380 Chinese nationals for allegedly running an illegal gambling operation in Haiphong City, 100 kilometres east of Hanoi. Police claimed the ring – which was operating with over 2,000 smart phones and 530 laptops across more than 100 rooms in a gated-community – had processed transactions worth more than US$435 million.

State-run Vietnam Television said the case was the biggest ever in terms of scale and “the number of foreigners breaking laws on Vietnam’s soil.”

Meanwhile in Malaysia, police arrested 97 Chinese nationals for allege