The EconomistAugust 31st 2019 491T
here wasno violence and there were
no victims, unless you count the crick-
ets, which rushed at each other, mandibles
agape, for a few seconds. But that did not
stop the police raiding the barn on the out-
skirts of Shanghai, abruptly halting the
cricket-fighting tournament, dispersing
the spectators and arresting the organisers,
all for the crime of gambling. Over the pre-
vious five nights, 1m yuan ($140,000) had
changed hands. So zealous have China’s
anti-gambling squads become that not
even battling bugs escape their attention.
Gambling has been outlawed since the
Communists took power in 1949. Main-
landers keen for a flutter must travel to Ma-
cau’s extravagant casinos or to Hong Kong’s
jockey clubs. Those who stay put have just
two legal outlets for a punt: the state-run
Welfare Lottery and the Sports Lottery, set
up in 1987 and 1994 respectively. Tickets
can be bought at corner shops for as little as
2 yuan; jackpots are capped at 10m yuan. It
was only in 1985 that the government made
it legal to play (but not bet on) mah jong.
The well-loved game has recently been
hit by a fresh interdiction, ensnaring poker
too, this time online. Since a state directive
last year, apps for playing either game have
been culled by the tens of thousands. And
to curb non-digital gambling, police last
year began to use drones to detect pop-up
casinos set up in the woods or on moun-
tainsides. The law threatens as much as a
decade behind bars for those who run gam-
bling dens, and three years for patrons.
Betting is an obvious target in the crack-
down on corruption led by Xi Jinping, the
country’s leader. State media have said
primly that officials “must resolutely stop”
playing mah jong. Long-mooted plans to
allow horse-racing and lotteries in the is-
land province of Hainan are languishing.
Even state-sanctioned lotteries have land-
ed in hot water. In 2015 an investigation in
18 provinces found that local administra-
tors had siphoned 17bn yuan from them.
Late last year 14 officials running the Wel-
fare Lottery were punished for corruption.
The government denied rumours that
136bn yuan had been misappropriated.Bet-shop boys
In July a state-backed report denounced
Suncity, Macau’s biggest operator of gam-
bling tours, whose clients include high-
rollers from the mainland. It alleged that
the firm was facilitating online gambling,which is illegal even in Macau; Suncity de-
nied the accusation. The report said that
the practice had caused “great harm to Chi-
na’s social-economic order”.
The report claimed that the annual
amount wagered by Suncity’s mainland cli-
ents in the online casinos it operates from
South-East Asia was over 1trn yuan, “equiv-
alent to nearly twice the annual income of
China’s lottery”. In other words, big sums
are being diverted from state coffers and
flowing abroad instead. China praised
Cambodia for its decision in August to ban
online gambling, and urged the Philip-
pines to do the same for a pastime it called
“a most dangerous tumour in modern soci-
ety detested by people all across the world”.
It is nervous about the many Chinese who
have moved there to set up gambling web-
sites since the Philippines began issuing
online gaming licences in 2016.
A Communist-Party-run lotto may
sound drab. But last year the Sports and
Welfare lotteries combined raked in 511bn
yuan in ticket sales, nearly as much as
America’s various state lotteries earned be-
tween them. Since Mr Xi took office in 2013,
sales have almost doubled (see chart on
next page). By revenue, Chinese lotteries
are on course to overtake America’s this
year, to become the world’s biggest.
Lotteries matter to the state for a num-
ber of reasons. The first is their contribu-
tion to social welfare. Only half of the ticket
revenues are devoted to prize money, leav-
ing more than a third for favoured causes
(the rest goes on administration). The gov-
ernment publishes an annual list of recipi-
ents, such as public sports facilities, theGambling
Rien ne va plus
SHANGHAI
The Chinese government runs the world’s second-largest state lottery business.
That helps explain why it is cracking down on gambling
China
50 Closing a critical think-tank
51 Chaguan: Taming Hong KongAlso in this section