Interested in playing games and making money? Recently, the Shanghai Putuo District People’s Court (hereinafter referred to as “Putuo Court”) concluded a case involving a new type of online gambling. Players can buy a ticket on the app to play mobile games, and the winners will share the prize pool.
Is this an E-sports competition or online gambling? And how should the organizers take their responsibilities if it’s the latter?
[Case Review]
Li ran an E-sports company. In 2020, the company developed an online game app, which allowed players to form teams and buy a ticket to play mobile games like the Honor of Kings and Game for Peace. The app would charge a commission on the ticket. After the game, players can withdraw cash from the app according to the ranking.
In 2021, the public security organ banned the app after receiving a report. By that time, the app had collected a gambling fund of more than two million yuan.
The public prosecution organ believed that Li, his employees, and his partnership shareholders should be investigated for criminal responsibility for their behavior had constituted the crime of opening a casino.
[Case Study]
According to the Putuo Court, the defendants Li and others developed an E-sports app in disguise, but actually set rules and provided a platform to control and manage the people participating in gambling. They also set up a separate payment system and profited from organizing online gambling over a period of time. Although it is different from a traditional casino, it is in essence a new type of crime that combines traditional casinos and popular E-sports, so the defendants should be punished according to law.
Accordingly, the Putuo Court sentenced Li and more than a dozen other people to prison terms ranging from one year to five years and six months for the crime of opening a casino, and imposed a fine ranging from 10,000 yuan to 60,000 yuan.
Online crimes have been on the rise with the development of network technology. And online gambling has changed from a “guess the result” contest to a real-life gamble, with the criminal methods more hidden and the business model more diverse. E-sports enthusiasts and practitioners should be careful about such potential risks and dangers.
1. E-sports vs. gambling
Gambling refers to the act of playing with property for a chance to win. There are two types of gambling: one is where the winning depends entirely on chance; the other is where the winning depends partly on chance and partly on the ability of the player.
E-sports belongs to the second type as it is an activity where players team up randomly and compete for victory using their game skills and strategies. E-sports is a kind of sport, but once the result involves property, it becomes gambling. Gambling participants will be subject to administrative punishment of detention and gambling organizers will be subject to criminal sanctions.
2. The risks of E-sports gambling
There are many risks in E-sports gambling. E-sports players should be vigilant with increased awareness against gambling and protect themselves from being cheated into gambling.
As E-sports has become so popular, illegal gambling platforms would use it to open gambling games. They would set up a separate payment and settlement platform, and people would be attracted to the “guess the result” contests and the competitions for ranking. They are not only illegal, but may also involve fraud, and players may risk their property and personal information in participating in those activities.
In some E-sports games, players can purchase virtual items (such as weapons, equipment, appearance, etc.) to improve the ability or appearance of the character. Some illegal games would try to maintain customer stickiness by having players buy virtual currency and then gamble on valuable virtual items in the game. It would not only get players addicted to gambling, but also cause them a lot of money to buy the virtual items.
3. How to prevent E-sports gambling
E-sports is very popular among young people nowadays, especially among the minors. If young people participate in E-sports gambling, not only is it illegal, but also it may have a negative impact on their psychological and social development. The E-sports industry and regulatory agencies should make joint efforts to prevent E-sports gambling. Here is some advice:
People engaged in the E-sports industry should improve their qualities and legal awareness to ensure the healthy development of the industry.
Regulators should supervise the compliance of E-sports, and work with the operators and organizers of E-sports competitions to develop measures against gambling in E-sports.
Greater mental support should be provided to E-sports players and participants, and E-sports companies should provide warnings against game addiction and gambling in E-sports.
Law publicity institutions should educate people on this new type of online gambling, help E-sports players identify new gambling crimes, and create an environment where gambling is prohibited.
[Relevant Laws]
I Criminal Law of the People’s Republic of China
Article 303 (2) Whoever opens a casino shall be sentenced to fixed-term imprisonment of not more than five years, criminal detention or public surveillance and shall also be fined. If the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than 10 years and shall also be fined.
II The Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security: Opinions on Several Issues Concerning the Application of Law in Handling Online Gambling Crime Cases
1.Conviction and Sentencing Standards for the Crime of Opening a Casino Online
Whoever uses the Internet, mobile communication terminals, etc., to transmit gambling videos and data or organize gambling activities under any of the following circumstances shall be deemed as “having opened a casino” as mentioned in Article 303 (2) of the Criminal Law:
(1) Establishing a gambling website and accepting bets;
(2) Establishing a gambling website and providing it for others to organize gambling;
(3) Acting as an agent for a gambling website and accepting bets;
(4) Sharing the profit of a gambling website.
If a person has the behavior listed in the preceding paragraph under any of the following circumstances, such circumstances shall be identified as “serious” as mentioned in Clause 2, Article 303 of the Criminal Law:
(1) The accumulative amount of money that he has taken from the winnings in gambling reaches 30,000 yuan or more;
(2) The accumulative amount of gambling fund reaches 300,000 yuan or more;
(3) The accumulative number of participants in gambling reaches 120 or more;
(4) The amount of income gained by establishing a gambling website and providing it for others to organize gambling is more than 30,000 yuan;
(5) The amount of income gained by sharing the profit of a gambling website is more than 30,000 yuan;
(6) Recruiting a subordinate agent for a gambling website, and the subordinate agent accepts bets;
(7) Soliciting minors to participate in online gambling; (8) Other serious circumstances.