The latest reports about enforcement action against betting agents in China are if anything an argument for official recognition of the trade rather than an argument for pushing the sector further underground.
Every time China’s official news agency Xinhua reports on an gambling agent network or unlicensed gaming scheme being broken up on the Mainland it only serves to act as a reminder that rich or poor, many Chinese people love gambling and fully intend to get their entertainment one way or another.
The latest enforcement action involved not only a VIP agent business but also five other schemes linking Chinese gamblers with online casinos and sports betting books outside China. Police in Hubei, central China, say the six operations had turnover worth 50 billion yuan (USD7 billion) spread over four years. Police have so far managed to recover less than two percent of that (800 million yuan) by freezing bank accounts operated by the alleged organisers.
A total of 27 people have so far been jailed in connection with the schemes and another 30 are expected to appear in court later this month, according to Xinhua.
The method allegedly used to facilitate the gambling is standard procedure in China—namely the creation of lines of credit through personal contact with players, plus collection of debts by an army of local foot soldiers.
A spokesman for the local public security bureau in Hubei used the phrase ‘money laundering’ in a public statement to describe the suspects’ activities. It’s the sort of phrase guaranteed to get the outside world’s attention and can be politically useful for indicating that China is active in dealing with international financial crime. US law enforcement authorities have an almost romantic attachment to the notion that money laundering is the cause of every evil act in the modern world. Not only does this risk tipping over into intellectual laziness, it also invites accusations of hypocrisy.
When someone uses a front company or shell bank to do something the US doesn’t like, it’s money laundering. When the Central Intelligence Agency or a proxy uses front companies to divert funds or weapons to pro-US groups in developing countries as occurred in the Iran Contra scandal in the 1980s, that’s covert operations in the cause of freedom.
Arguably all posturing and hand wringing about money laundering achieves in the context of the Asian casino industry is the criminalisation of betting agents. It’s certainly not a particularly helpful phrase if China is seeking a rational and long-term way to deal with her citizens’ love affair with gambling. This involves thinking about how to manage the public demand for gambling and make it work in the public interest through regulation and taxation. That’s a much harder problem to tackle than busting betting agents.
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