A ranking member of China’s governing communist party has suggested liberalising China’s tough laws on gambling, in order to raise extra cash for social causes during the economic downturn.
The official cited the example of Hong Kong. The Hong Kong Jockey Club, the only legally sanctioned provider of betting services in the former British colony, dramatically increased its revenues and depressed those of illegal syndicates after allowing betting on live football matches in 2001. Between the 2003-04 season and the 2006-07 season, the tax take from regulated football betting in Hong Kong rose 64.3 percent from HKD1.65 billion (USD210 million) to HKD2.71 billion (USD350 million).
The starting point for reform in China may be a shake up of the legal lottery.
“Our present lottery games are monotonous,” said Yang Jingzhi, a Hebei delegate to the recent Chinese People’s Political Consultative Conference—sometimes referred to as ‘China’s parliament’. The comments came during the Beijing gathering during a discussion panel on sport.
“I suggest we deregulate the lottery,” said Mr Yang, adding for good measure: “We should fully introduce international practices, such as betting on horses, ‘mark six’ and various others.”
China’s state lotteries—the welfare lottery and the sports lottery—have actually modernised their offer to players in recent years. Pooled fund products such as Power Ball and Big Lotto, offering high payouts but long odds, have proved a hit with consumers.
Introducing new lottery products is not though quite the same as general liberalisation of the market, which tends to imply in the West an ending of state monopolies and an opening of the market to private enterprise. There are no signs so far that the Chinese government has any plans to allow wholesale franchising of its vast domestic markets to private gaming service providers. China has however in recent years allowed private enterprise ventures such a Melco and AGTech to set up their own distribution chain of shops in major Chinese cities to sell branded lottery products.
Since the process of economic reform instigated by Mao Zedong’s successor Deng Xiaoping in the late 1970s, the Consultative Conference has frequently been used as a testing ground for new and sometimes radical ideas before their wide scale adoption as state policy.
“There are lots of types of lottery in Britain and the U.S., can we see any harm? As long as it is well legislated, there is not much harm,” added Mr Yang.
He appears at present to have momentum on his side. China’s sports ministry recently sanctioned a horse race meeting in Wuhan—the pre-revolution home of the sport—as an experiment, although cash betting was not allowed.
It may, however, need a critical mass of influential voices higher up in government before any tipping point is reached in favour of change. There are signs this may be happening.
“We are facing a problem that underground casinos and overseas gambling have dangerously broken in, taking an estimate ten times as much as our official lottery,” deputy sports minister Wang Jun told the same meeting.
“In Hong Kong, where the legal lottery is well developed, the official business is ten times as big as the private ones,” added Mr Wang.
Mr Wang said China’s official lottery alone currently employed 300,000 ticket sellers around the country.
“The sports industry in the short term can help maintain stable economic growth and employment,” he stated.
Gambling was banned in mainland China after the communist takeover in 1949, the exceptions being the two state lotteries.
