ARE CHINESE OFFICIALS TURNING TO ONLINE GAMBLING?

3 July 2009

Beijing losing the gambling battle
 

Stephen Wong, writing in the publication Asia Times Online this week made the interesting observation that Communist Party aparatchiks and Chinese government officials could be turning to online gambling for their entertainment and profit in a reaction to government crackdowns on corruption and misappropriation of public funds.

Wong notes that Beijing's efforts to crack down on gambling with public funds by Communist Party and government officials seem to have made little headway.

"While longer jail terms and the risk of losing their jobs fail to deter officials from gambling, visa restrictions to Macau - the most popular gambling destination for Chinese officials - has only driven officials to online casinos," Wong reports.

"As a result, online gambling inside China increasingly flourishes and the sums involved are become increasingly staggering."

The writer goes on to give examples supporting his contention. In one, government officials and the heads of state-owned companies were those busted by police for Internet gambling on sports, horse races and lotteries in six online casinos. The casinos have managed to accrue more than 50 billion yuan (US$7 billion) since the illegal operations began in 2004.

The arrests and misuse of public monies triggered a public outcry that proved embarrassing for state asset watchdogs.

In his article, Wong reveals that Chinese political leaders have launched recurring campaigns against officials for gambling as part of an effort to curb the widespread corruption that has undermined public trust in the government. He writes that as early as 2005, the Communist Party issued an explicit gambling ban on all officials and threatened to fire those who dared to take part in gambling activities. But apparently the ban has failed to deter officials.

Macau, the former Portuguese colony and gambling centre now under China's sovereignty, used to be the favourite destination for Chinese officials. In January, anti-corruption agents revealed that 53 officials from Guangdong province embezzled 22 million yuan (US$3.2 million) in public money to gamble in Macau, the articles says in giving another example. And last month, Zhang Jichun, a housing official in Beijing, stood trial for allegedly embezzling 7.3 million yuan to gamble in Macau from 2005 to 2007.

In another case, all nine top executives of Beijing Urban and Rural Construction Group, a state-owned real-estate company, were hooked on gambling. The former general manager, Nie Yuhe, would stay up the whole night gambling, the Xinhua news agency reported. All nine have been sentenced to jail for embezzling public funds or taking bribes.

"A 2008 study of 99 high rollers from mainland China showed that 59 had some sort of state affiliation: 33 were government officials, 19 were senior managers at state-owned enterprises and seven were cashiers at state businesses, according to the study, which was conducted by Zeng Zhonglu, a professor at Macau Polytechnic Institute," the article continues.

"This prompted the government to impose visa restrictions on government officials last year. The new regulations limit a mainland official to only a single, seven-day trip in at least three months."

While the visa control was hailed as quite effective at the beginning, the active participation of government officials and state managers in online gambling has given Beijing new challenges, claims the writer.

Chinese officials are not highly paid. But they are often seen flaunting decadent lifestyles and betting big in casinos outside China. According to Zeng Zhonglu's study, gambling Chinese officials reportedly lost an average of US$2.7 million each in Macau.

"Officials seldom use their own money to gamble," the Asia Times Online article continues. "Li Weimin, the mayor who gambled away more than 90 million yuan in Macau, did not spend a penny of his own money, although he owns several properties and shares in several companies, state media reported.

"As mayor and head of four township companies, Li could take money from company accounts as easily as if it were his own money. And his power was totally unmonitored: nobody launched any complaints and no auditor raised any questions. He was not caught until after he left his position in 2004.

"Similarly, Liu Sicheng, the finance chief of a small city in central China's Hunan province, gambled 8.1 million yuan of public funds from 2002 to 2007 without being noticed until he tried to flee. He was a high-profile gambler at local casinos and even bought a car to carry cash to casinos."

The article concludes by noting that China's lawmakers have been calling for harsher punishments for gambling officials. The jail term for gambling in the effective Criminal Code is set for three years. As a growing number of public servants, especially high-ranking officials, are involved in cases of gambling with public money, lawmakers have requested the term be extended to life imprisonment.

"But raising jail sentences will likely do little to scare away officials from casinos. China's up-down method of supervision cannot effectively monitor the leader of a government body, and as long as their power is not better constrained, officials will always have enough public money to feed their gambling habits.

"To curb gambling and gambling-linked corruption, China needs a free press and an independent judicial system to expose the wrongdoing of public officials. While heavy handed campaigns can curb gambling for a while, to root out gambling and corruption by officials, Beijing needs political reforms."

Online Casino News Courtesy of Infopowa

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