Chinese online gambling potential

Lawyer and specialist on the gambling industry in China, Peter Pang, gave readers of a law intelligence journal a review of the potential of the Chinese online gambling market this month, presenting relevant statistics.

Pang, who joined the Washington DC law firm of Dickinson Wright last month and travels between Washington and his company in Shanghai, wrote that although gambling is generally illegal in China with the exception of SAR Macau, in 2010 around US$15 billion in illegal gambling took place, at least half of it via internet or mobile devices, according to the Center for China Lottery Studies in Beijing.

“This speaks volumes about the future of legal and regulated online gambling in China, as the demand is there and the potential for a successful launch is every online operator’s dream,” Pang opined.

“This dream has to be tempered with the fact that changes in regulations to allow for online gaming in China will not happen overnight and everything in China is a step-by-step approach. However, this does not chill the prospect that nearly half a billion eager internet users can someday access an online platform to satisfy their gaming appetite, as not every Chinese Mainlander can make the trek to Macau regularly. The potential is limitless.”

Other interesting stats from his article include:

* One billion mobile telephone users, 400 million mobile internet users and 150 million 3G phone users as at May 2012.

* Broadband internet users total 513 million, already double the number in the US and accounting for only 38 percent of the total Chinese population. By comparison, the US has only 245 million internet users, with a penetration rate of nearly 78 percent.

* 140,000 internet cafes and bars operating a total of 14 million computers which each log an average of 11 hours continuous use each day – most of it associated with internet gaming.

* On average, China’s internet users spend 18.3 hours per week on internet access, or 2.6 hours per day, according to China Internet Watch.

Pang appears to be optimistic on the possibilities for a more relaxed approach to gambling by the authorities, although he warns that regulation will not happen immediately. He expects political changes which could herald more leeway for lotteries, gaming for tokens, betting on horse racing and bingo…perhaps as early as next year.

Regulation will at some stage be imposed, which is why forward looking companies are already starting to establish presences in the country, usually through Chinese partnerships.

Pang is a graduate of University of California Berkeley in Biochemistry; Santa Clara Law School where he was a member of Law Review; University of Houston with a LL.M. in International Economic Law. He attended a certificated program at the Fuqua School of Business at Duke University, and also studied law and economics in China and Hong Kong.

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