China’s National People’s Congress has passed an amendment to its criminal law that will, from 1 March 2021, create a new crime against cross-border casinos found to be organizing or soliciting Chinese citizens to gamble and increase penalties for those found guilty of serious breaches.
According to a report by Chinese state media outlet Xinhua, the amendment – first drafted in October – was adopted last Saturday and specifically targets anyone who “organizes mainland Chinese citizens to gamble outside the country (borders).”
The penalty for this new crime will match the crime of “opening casinos” in China, which carries a sentence of not more than five years of fixed-term imprisonment, criminal detention, or control, in addition to a fine. In serious circumstances, the person will be sentenced to more than five years but not more than 10 years of fixed-term imprisonment, in addition to a fine.
As reported by Inside Asian Gaming at the time, the original draft law stated, “Whoever operates or manages casinos, or is designated by casinos outside the country, and organizes or solicits Chinese residents to participate in overseas gambling, where the amount involved is large with a serious nature, shall be punished according to provisions under the preceding paragraph.”
While no detailed explanation is contained within the new law as to how it will be implemented, JP Morgan analysts DS Kim and Derek Choi suggested in a note that Macau won’t be excluded from mainland China’s wrath.
“It’s worth noting that the revised law clearly states gambling outside the borders in brackets, not just ‘overseas or foreign gambling’,” they state.
“In our view, this should put an end to the discussion on whether Macau SAR is covered by this law, because ‘outside the borders’ is typically interpreted as being outside Mainland China in the legal context, encompassing the HK and Macau SARs, and Taiwan.”
Credit Suisse analysts offered a similar view when the draft law was published in October, noting that China’s Ministry of Justice “clearly defines” exiting or entering the mainland to Macau and Hong Kong as “crossing the border” and citing recent statements by provincial governments in Jiaxing, Nantong and Guangdong which specifically named Macau in efforts to combat cross-border gambling.
“After the central government publishes the rules and regulations, it is the provincial levels that execute that,” the analysts said.
“Although the crackdown rules have not provided a clear definition of the meaning of ‘cross border’, at the provincial government level we note that Macau, including the junkets, casinos and shadow banking, are being named time and again on their list of crackdowns.”
The law could also strike fear into junkets and their agents, JP Morgan’s Kim and Choi propose, because “they could be personally liable for the mere organization of a gambling trip under the amended law.”
Passing of this amendment to China’s criminal law comes after the Ministry of Culture and Tourism announced in August that it had established a “blacklist” of overseas tourist destinations it said were disrupting the nation’s outbound tourism market by opening casinos targeting mainland Chinese customers.
The blacklist, devised in conjunction with other departments, would see travel restrictions imposed on Chinese citizens going to certain overseas cities and scenic spots, the Ministry said, although it failed to identify exactly which locations it was referring to.
