How China’s E-Commerce Giants Enable Illegal Online Gambling

Gamblers have funneled over $100 billion through Chinese tech platforms during the pandemic. Now, the police are cracking down.

A dark corner of the cyber world benefited from increasingly convenient internet-based payment and logistics services as e-commerce soared in the pandemic — illegal online gambling.

The shadowy, often offshore operators of illicit gambling sites found witting or unwitting enablers in some of China’s leading tech giants, according to police who are conducting a huge crackdown on an unprecedented surge in online gambling.

Investigators discovered that illegal gambling sites have relied on major search engines and social media platforms that are household names to lure gamblers while using leading e-commerce platforms and delivery companies to facilitate massive fund transactions disguised as online shopping deals.

They include China’s biggest online search engine Baidu Inc., Tencent Holdings’ messaging apps QQ and WeChat, and Ant Group’s payment service Alipay, authorities say. E-commerce site Pinduoduo appears to have been especially vulnerable. Investigators also implicated major courier companies including New York-listed ZTO Express, Shanghai-listed YTO Express and STO Express, as well as a number of logistics companies.

“Many large internet companies are involved in the investigations,” one police officer involved in the probes said.

The appearance of such icons of China’s booming e-commerce economy in gambling operators’ toolkits raises questions about whether the internet giants conducted adequate internal oversight and risk control efforts to vet illegal dealings, authorities say. The investigators claim there’s little question that many of these companies profited from involvement in the gambling operators’ complex business chains. Continue to read the full article here


– This is an original article written by Yuan Ruiyang, Ye Zhanqi, and Han Wei of Caixin Global. It has been republished with permission. The article can be found on Caixin’s website here.