Chinese Authorities Pursue Gambling-related Content Within Mobile Apps

Chinese Ministry of Culture banned all gambling-related content within mobile apps and games.

Chinese authorities are going after gambling content inside mobile apps. The Ministry of Culture has already warned developers that any gambling content within mobile apps for smartphones and tablets is not permitted. Mobile casinos in China are prohibited, just like online casinos and land-based gambling destinations on mainland.

The first warning was issued last year, when twenty seven game developers and publishing platforms, as well as app-store operators were told to avoid gambling content in apps. The biggest names included Android Market and Baidu App. They were also asked to change any existing apps featuring inappropriate content until 2013 was through.

Shaky definition of gambling content

Chinese Ministry says that any lottery-style in-app purchases, which take place inside games and increase player’s chances of winning and/or receiving a prize or a reward, fall under Chinese gambling laws jurisdiction. They are considered to be gambling because lotteries have a random nature and high uncertainty of rewards.

Corrections according to requests

Out of the 27 developers and operators, twenty have already submitted reports to the Ministry about the changes they’ve made to their applications and games. Majority of changes referred to deleting sensitive information, which might be regarded as gambling-related. Cancellations of lottery-style in-app purchasing possibilities were also carried out.

The other seven companies have failed to make such edits to their apps by the specified deadline, and have been issued administrative penalties. Two of the firms were fined $10,000 and $20,000.

Expert’s view on the matter

China band gambling-related content within mobile games and apps

• Mobile gambling is illegal under Chinese gambling laws

• In-app purchases in lottery-style games are considered to be gambling-related

• 20 out of 27 mobile app developers have complied with the new regulations

A Chinese game analyst, Yu Yi, was quoted by the Chinese gambling news after giving an interview to a local newspaper. He opined that rapid growth of mobile apps on the market brings a need to stop the increase in gambling-related content within mobile apps and other related products. And according to him the responsibility for this lies mainly with the developers themselves.

The expert confirmed that the main goal of the government’s policy is to remove and regulate mobile apps, which offer obvious gambling content and elements. And although these specific regulations won’t affect mobile gaming market as a whole, they will have a huge effect on lottery-style in-app purchases.

Managing director of PapayaMobile, a Beijing-based mobile solutions developer, commented that most of the Chinese mobile gaming developers and operators are copying their Japanese colleagues. This is especially true with the addition of gambling content to the games.

Implications of the ban

The imposed ban on gambling content will see all mobile game operators focusing on this problem, avoiding offering gambling-related products to Chinese mobile gamers. According to the Ministry statistics, the market for mobile games has already reached 14 billion Yuan in revenues last year. This was a 113 percent increase year-on-year. China now has over 170 million offline mobile game players and 120 million online game users.

According to Li Gang, the Ministry official, further action could be taken by the Ministry to help regulate and govern the mobile gaming market within the country. Additional measures will include a full-blown manual providing detailed description of in-app purchases policies. A brand new blacklist of companies supporting gambling and vulgar content, could also be drawn up.

While these actions are totally in line with the country’s gambling regulations, foreign industry experts still regard them as way too stringent. In-app purchases are a common thing on the Western mobile gaming markets and no one is considering them to be gambling-related there.

It remains to be seen just how effective the new regulations will be. China still upholds a total ban on online and mobile gambling for its residents. However, many Chinese gamblers find a way to circumvent restrictions and gamble at foreign-based online and mobile sites.

Land-based gambling is a different story. The only legal way for the Chinese population on the mainland are state lotteries and horse-race betting the majority of which is done in Hong Kong. As for casino gambling lots of Chinese gamblers flock to Macau, which is a special administrative region, with its very own set of gambling regulations.

And of course there’s the issue of illegal gambling. In a country as big as China, banning gambling activities naturally leads to growth of illegal offerings. Although such operations are pursued by the authorities and bring heavy fines and prison terms for the operators, there are still plenty, providing much needed services to mainland China population.