China - online gambling regulations

Online gambling regulations, laws and taxes in China

Online gambling has become one of the most lucrative markets over the years, and each year the revenue it provides increases. The constant improvement of games, technology and new exciting ways to gamble has players all over the world flocking towards online casino sites from the comfort of their homes. With online gambling going mobile it has become even more popular, as players are able to access their favourite games from anywhere at any time.

Unfortunately, when it comes to laws and regulations in certain parts of the world things aren’t always as simple. Many countries have chosen to render online gambling activities illegal instead of embracing the phenomenon and letting it increase the country’s revenue.

China is one such country, and while many forms of gambling have been considered illegal for many years in China, it is ironically still one of the countries with the biggest gambling revenues. Over the years China remained unmoved by the lucrative market or the growth in interested players within its borders. Lately, however, it seems that China has started to reconsider and change their stance on online gambling to some extent.

In this guide, we take a look at the history of gambling in the country, the current laws and regulations, and prospective changes that could be made in the near future regarding these laws.

The history and current laws of online gambling in China

Gambling is not a new craze in China. In fact, games such as Pai Gow and Keno have been alive and running in China since the 19^th Century. There are even talks on gambling starting in China as early as 943 AD. There is evidence that gambling has taken place in China since the Qing Dynasty. Gambling has been prohibited in China for centuries, and very strict rules were put in place to punish those who went against the law. These punishments were very severe and included fines, jail time and in worst-case scenarios even execution.

But in the mid-16^th Century, the gambling industry became very popular due to Macau becoming the permanent base for trading. In Macau, players were starting to take part in popular games such as Pai Gow, Fan Tan, and Sic Bo without the fear of being prosecuted. It is very ironic as the Qing Dynasty government legalised some forms of gambling back in the 19^th Century simply because they needed funds for the Spanish-American war.

Again gambling was banned later on by the government of the First People’s Republic of China. But in 1987 a number of gambling lotteries were legalised.

New laws and a silver lining for online casino players

While the online casino industry is certainly booming in China, it is still very much illegal at the moment. Most Chinese residents, therefore, opt to play Chinese online games on internationally licensed sites. These sites are not just less of a hassle to play at, but they also have a wider variety of gaming options to choose from.

The good news is that in 2017 the Ministry of Culture put into effect a revised set of regulations that would make online casino gambling easier and legal. These regulations were drafted with the purpose of gaining control over the online casino industry, but also as a way to protect players from harmful sites and possible gambling addictions.

With these regulations, online operators are required to add deposit and withdrawal limits for all players as well as keep players from accessing the games if they have not created an account. The government also created a much stricter set of rules when it comes to payment confirmation, as a means to protect players from accidental payments. With this being said, online casino operators are only considered legal if they have a valid Online Internet Culture Licence.

Earlier in 2018, it was announced that the Chinese authorities have drafted a new proposal that will make online gambling legal on Hainan Island. If this is set in motion there is hope that some of the gambling potentials will be led towards the Island. While players are already allowed to legally participate in gambling activities in Macau, Hainan Island will then become an alternative where online gambling, lotteries, and sports betting will be allowed within the borders of the island. The proposal is still in its early stages and it might take some time before it is implemented.

Are gambling winnings taxable in China?

With online gambling considered to be legal, Chinese citizens can participate in legal gambling where their winnings will determine whether they are taxed or not. Those who obtain wins lower than 10,000 RMB won’t be expected to pay taxes on their wins. However, those who make winnings bigger than 10,000 RMB will have to pay a steep tax rate of 20%.

For players taking part in online gambling in Macau, winnings are tax-free. This raises the question of whether or not winnings will also be tax-free on Hainan Island once it becomes a legal gambling zone.

For players who take part in online gambling illegally on sites with no licence, winnings are also tax-free as they cannot be declared as income. On the other hand, players doing so should also be aware that this form of online gambling is considered illegal and if their winnings are discovered they can expect heavy penalties.

Is online gambling legal in China?

When it comes down to it, online gambling is only legal if you are playing at a site that has an Online Internet Culture Licence. Any gambling activities on sites not carrying this licence are considered illegal and can be punished by law.

With China having one of the most lucrative gambling markets of all, it is to be expected that many online operators are still opening their doors to players from this country. As a player, it is wise to opt-in and play only at online casinos that have been reviewed and are considered safe and secure to play at. Luckily there is a long list of top-rated international casinos that allow Chinese residents to play responsibly on their sites and also in their own currency.