China Slaps $4.2m Fine On Payment Processor For Online Gambling Links

China Slaps $4.2m Fine On Payment Processor For Online Gambling Links November 28, 2019 November 28, 2019 Carolyn Dutton
 Industry November 28, 2019 by Carolyn Dutton

The Chinese government has taken a very harsh stance on online gambling activities since all forms of gambling are banned in China but offshore iGaming operators continue to flout laws and target Chinese gamblers. 

Beijing has now sent a clear message to those engaging in online gambling activities by imposing a massive fine on Chinabank Payments, a payment processor based out of Beijing. The company was hit with a heavy penalty for its links to unauthorised online gambling sites. The Chinese government hit the payment processor with a RMB29.4 million, which is the equivalent of $4.2 million.

Chinabank Payments is owned by JD Finance, which is a spin-off company from China’s online retailer

For this particular case, the payments processor is accused of facilitating overseas transfers by mainland residents. This is a major issue since Beijing has been tightly controlling money flowing out of China. Many of these transfers happened in the period between May 2017 and May 2018. Though Chinabank was not the only payment channel involved, it is the first one to be hit by penalties publicly.

According to Chinese media, the money transfers were mainly linked to an online gambling operation in Cambodia. There are rumors that that the online gambling site in question was related to some of the big names in Macau gambling. This was a thriving online gambling operation with over a million customers being serviced regularly.

Major Issues With Financial Services

This is not the first time that has had a brush with the law. Earlier this year, the Monetary Authority of Macao (AMCM) included its name in a list of mainland firms that were involved in financial activity that was deemed suspicious. It warned that Macau visitors and residents should be wary of anyone claiming that they can facilitate money transfers from the mainland without going through legal means via the use of underground banking.

China has always been very strict with money outflows and the money going into Macau is one of the major issues. Macau is favorite destination for Chinese money since Chinese high-rollers and others use its underground banking links to take money out of the country. This fine on Chinabank Payments makes it appear that the Beijing is extending its crackdown on money outflows by looking into online gambling operations.  

Other payment processors are keeping their nose clean and are cooperating with authorities. Alipay, one of China’s big names in payments, has sent over 500 cases of suspected gambling payments to the authorities and has been cleaning up its platform to ensure that no one uses its platform for online gambling payments.

Carolyn is our legislation expert, with a background in law she is able to cover the current state of gambling around the world