Chinese Online Gambling Laws and Regulations

The online casino industry has turned into an extremely lucrative market over the past few years. Many avid gamblers have turned towards online gambling due to the convenience, spectacular selection of games and big rewards. All over the world more and more people are becoming aware of the benefits of online gambling and trying their luck at one of the hundreds of online casinos reviews available.

Popular games such as Keno and Pai Gow were brought to existence in China way back in the 19th century.

While the Chinese have a reputation for partaking in online gambling and other forms of gambling, one can’t help but wonder about the gambling regulations of the country. Gambling at foreign sites and casinos has been considered illegal in China for many years. In recent years the government has gotten even more rigid with its gambling regulations in hopes of forcing more citizens into Chinese casinos. 

One can’t help but wonder if strict laws are maintained to ensure responsible gambling or restrict access to gambling activities completely. In this article, we take a look at the Chinese laws on gambling as well as how players will be affected when they do attempt to gamble online. 

History of Gambling in China

The Chinese have participated in many forms of gambling over the past few centuries. Some believe that gambling only started here in 943 but others believe that it has been around long before then. There is a lot of evidence that shows that gambling existed during the Qing Dynasty but that it wasn’t as popular as it is today. 

Laws prohibiting gambling in China go back to the Wei Kingdom dated 403 – 225 BCE. Back then anyone caught participating in any form of gambling was given a fine. The first legal documents regarding gambling were drafted during the Tang Dynasty.

The Chinese have always had a very strict rule regarding illegal activities. While illegal gambling first resulted in monetary fines it eventually led to forced military service. Those who still participated in gambling activities during military service were given a more severe punishment and for some, it even resulted in execution. 

From 1557 there were no laws to prevent gambling in Macau. It was during this time that Macau became a permanent base for trading. Games such as Pai Gow, Sic Bo and Fan Tan were played without any fear of penalty or prosecution.

The gambling industry became very popular during this period and during the 19th century, China was open to certain legal forms of gambling. The main reason for this was because they needed funds for the war and the late Qing Dynasty government didn’t have the best structure in their governing. 

Mainly some forms of gambling became legal but were taxed in order to fund the Spanish-American war. These legal lotteries didn’t last very long as it turned out the jackpots were rigged by insiders in the benefit of their close relatives and friends. When The People’s Republic of China came into power they completely banned all forms of gambling. Since the beginning, the ruling authorities of China did not approve of any forms of gambling.

While there has been a struggle with the legalities, the government has made no secret of their disproval of any form of gambling. There are a few legal gambling lotteries that citizens can partake in such as the Welfare Lottery. This only came into effect in 1987.

New Online Gaming Regulations

At the end of last year, China’s Ministry of Culture released a revised set of regulations that were put into effect on the 1st of May 2017. The newly improvised gambling regulations have been altered to focus on online game operators of which the biggest at the moment is NetEase. With the new gambling regulations in place, the Chinese government is making sure that online gambling sites adhere to their rules. 

The new regulations have been put in place to ensure responsible gambling and also as a way of eliminating fraudulent and crime driven sites. Online sites will be expected to make a lot of information public and also provide the government with sensitive inside information including name, property and content.

They will also be required to make random draw results by players public. With the new set of regulations, the Chinese government aims to create a safer and fairer gambling environment. 

Online operators are requested to add limits to deposit and withdrawal amounts as well as prevent any players from playing until they’ve created an account. There are also stricter rules regarding payment confirmation to ensure that payments aren’t made accidentally.

While many of the rules aren’t new they have been brought to light as a reminder of what is considered legal and illegal in China. Online operators can only legally serve Chinese citizens if they have an Online Internet Culture license.

Are Gambling Winnings Taxable?

While there are still various illegal gambling activities, the government have made an exception and allows gambling including online gambling to take place. Chinese citizens that take part in any form of legal gambling and hit a few wins will most likely not be taxed.

The only time tax is applied to winnings is when a player has a win amount of more than 10,000 RMB. These wins are normally charged with a 20% tax rate. Players gambling in places like Macau can also rest assured that their winnings are tax-free. 

Online gambling at foreign sites that have no legal licensing is considered illegal and punishable by law. If a player has won a prize at any of these online casino sites they would not be able to declare the income. Seeing as it is an illegal income, it is technically tax-free. Citizens can get away with this but in the case that their illegal winnings are discovered they will be facing heavy penalties.

The Future of Gambling in China

The Chinese gambling industry is one of the most lucrative in the business and even illegally they've produced almost $4 billion in revenue annually. With the recent gambling regulation updates in China, it is clear that the government does not necessarily want to restrict online gambling but they aim to make it safer for their citizens.

As a player, you will not be prosecuted if you abide by the rules and play only at online Chinese casinos that have been approved and granted a license by the Government.

There are plenty of online casinos that are safe and secure to play at for anyone situated in China. If you would like to visit any of these sites you can take a look at our top list of international online casinos for more information.