The Chinese population currently stands at 1.37 billion, and as a nation who love cerebral games, the potential gold mine awaiting online poker operators cannot be overstated. Frustratingly though, poker is not currently recognised by China as a skill based game, and Chinese law has banned online gambling. It is clear that interest in poker exists within China, but online operators are facing a difficult choice in terms of how to promote the game without stepping on legal toes.
Option 1: Operating offshore despite the legal risk
Most major online operators have made the choice to quietly accept players from China. While the number of Chinese players represents a tiny percentage of the player pool of sites like PokerStars or 888Poker, some operators have opted for a more aggressive strategy.
As reported in The Guardian in 2014, Bet365 has in fact taken a proactive approach to the Chinese market, continually switching their website address in China so as to evade any repercussions. The company also has a call centre in Stoke which employs Chinese speaking workers. Furthermore, payment methods have been created, which allow for transactions in the Chinese currency.
The official statement by Bet365 is as follows: “There is no legislation that expressly prohibits the supply of remote gambling services into China by operators who are based outside China. We have no people, assets or infrastructure in China and does not engage any agents, aggregators or intermediaries, for any purpose, in China.” Of course, it isn’t easy to welcome customers from within China without having a contact inside the country to help promote your product and smooth the movement of payments. This is why affiliates are often paid to do exactly that. It is not unusual for these affiliates to face charges for representing the offshore gambling company, but that risk is simply seen as part of the job. It is the affiliates who have the responsibility of assessing the legal ramifications of their actions.
The Chinese version of Bet365 website
Chinese legislation is unambiguous
The Chinese legal position on online gambling is unambiguous, with their president having expressed his intense dislike of gambling, and article 303 of their laws on the subject reading as follows: “That whoever, for the purpose of reaping profits, assembles a crowd to engage in gambling, opens a gambling house or makes an occupation of gambling is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention or control, in addition to a fine.” If anyone remained in any doubt about whether this applied to online gambling or not, the 2005 addition to this legal text dispels any potential argument on the matter: “whoever for the purpose of reaping profits, sets up gambling websites on the internet or acts as an online gambling agent will be regarded as ‘opening gambling houses’ and will be punished according to article 303 of the criminal law.”
Option 2: Social Gaming and non real money offerings
Despite the fact that real money operators are taking risks to offer poker in USD and renminbi currencies, there are other entirely legal options for Chinese nationals to play poker – provided that the financial element is removed. Social networks have granted the platform upon which poker can be offered without any exchange of money taking place, and these have certainly proved popular.
Ourgame and Pokermonster
Ourgame is a company that continually leads the way when it comes to non real money offerings for the Chinese people, having already had roots in board games and other card games well before poker became one of its products. The company is even listed on the Hong Kong stock exchange, and has been since 2014.
While Ourgame does not offer monetary prizes at their poker tables, there is no law against offering prizes which have a financial value, which is why PokerMonster (the online poker product of Ourgame) offers WPT Sanya seats as prizes for tournaments throughout the year. Such was the closeness of its ties with WPT, that Ourgame eventually decided to buy out WPT for $35 million in 2015.
Frank Ng, CEO of Ourgame, had the following statement to make about the purchase: “World Poker Tour is unquestionably the global leader in organizing world-class poker events, and we are very proud to acquire one of the world’s greatest brands.” Since that buy out, Ourgame has helped promote the WPT, along with poker itself, throughout Asia. Ourgame continues to offer games that reward players with valuable items, tournament seats, and also “gold” credits which players can trade for real money. Operating in this way maintains an incentive for customers to compete, while still keeping Ourgame on the right side of the law. Their strong following within mainland China, and the smart way in which they operate, has led to Ourgame being more than competitive when compared to offshore poker rooms.
Option 3: Betting on a non gambling form of poker – Match Poker teaming up with Alibaba
Match Poker is another big name trying to get a foot in the door of the Chinese market, and has developed an ingenious way to keep the game on the right side of Chinese law. The poker offered by Match Poker is a little different, as players assemble into teams and face off against opposing players on different tables. Each player has an opportunity to play the exact same hand as each other against their table, and their total winnings or losses from that hand generate points. These points are then used to determine the winner after a set number of hands.
Not only has Match Poker managed to create a legal form of Texas Holdem, but the company has kept the core skill factor, and in the last few weeks, has even gained a business partner. Oceans Sports and Entertainment owns Match Poker, and has announced a partnership with major internet name, Alibaba. Their primary goal is to crack the Chinese market, with a plan to attract a number of customers from China that could potentially run into millions. Even without raking real money from their games, this would allow Poker Match to generate vast amounts of income from advertising, sponsorship, subscription fees, alongside many other avenues.
Alibaba founder and CEO, Jack Ma