Study Reveals Criminal Gangs Involved In Chinese Black Market Gambling Industry
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A government crackdown on an activity or product often leads to black markets, and that’s apparently the case when it comes to online poker and casino gaming in China.
The country banned online poker and mahjong in 2018 in an attempt to curb gambling in the country. That’s now led to many gamblers frequenting underground live casinos or heading to illegal online gaming platforms to skirt the law.
A recent report from the United Nations Office on Drugs and Crime (UNODC) now points to global crime networks located in Southeast Asia as running these operations.
“Online casinos and cyberfraud have also recently mushroomed across Southeast Asia, particularly in the Mekong since the onset of the COVID-19 pandemic,” UNODC Southeast Asia and Pacific regional representative Jeremy Douglas noted in the study. “Alarmingly, organized crime groups running many of these operations have done so with growing sophistication, through the use of data mining and processing, blockchain technology and, increasingly, generative artificial intelligence.”
Countries Step Up Enforcement
Much of these efforts are geared toward Chinese users. As of 2020, government officials estimated at least five million participants in this underground industry. That equates to $157 billion in capital outflows from the country and “have attributed it to the rise in illegal online gambling and telecommunications fraud,” according to the UNODC.
The only Chinese jurisdiction offering legal casino gaming can be found on the island of Macau, which hosts several casinos as well as plenty of high-stakes poker action.
While the government may have made online gaming illegal, many Chinese gamblers continue playing online. The report points to anonymous payment methods like cryptocurrency as enabling the practice.
Authorities also have a limited view of what goes on in an online gambling account, making it difficult to verify the source of funds. Some of those funds may not necessarily be used for legitimate gambling as well, according to the report.
The UNODC reports that some of those platforms are also being used by organized crime to launder money. Law enforcement face many hurdles in curtailing much of this activity due to of the gangs’ sophisticated measures.
Because of this murky world of cryptocurrencies, international transactions, and the possibilities of money laundering, police in China, Laos, Myanmar, and Thailand jointly launched a “special regional campaign” in 2023 to combat organized crime groups involved in online gambling, telecommunications and cyberfraud, human trafficking, kidnapping, and illegal confinement. So far, that has led to the arrest of more than 1,350 suspected criminals.
