Chinese online gambling syndicates let illegal bettors use prepaid e-commerce cards, gift vouchers, and gaming credits as casino chips, say police.
Officers say that gamblers use the cards to top up their balances on gambling platforms. The syndicates then convert the vouchers into cash by using professional money mules and third-party verification platforms, the Chinese media outlet E23 reported.
And the syndicates are building a collection of small-scale online retailers and tech experts to help them run the network, say officers in Sichuan Province.
Chinese E-Commerce Cards Become Casino Chips: How It Works
Journalists from the Chinese media outlet CNR interviewed an online retailer who used the pseudonym Zeng Lin.
Zeng Lin said she launched her business in 2023, but enjoyed little initial success selling e-commerce store vouchers.
“One day, someone contacted me online,” Zeng Lin said. “They said they could provide me with a steady flow of cards. They said that as long as we sold their cards, they could guarantee we would make sales.”
Zeng Lin agreed.
“Sales were still slow at first,” she said. “I would only sell a maximum of only a few thousand yuan’s worth of vouchers a day.”
One thousand yuan is worth just under $150.
However, the store owner said that two weeks later, “sales suddenly exploded,” bringing in revenues of 600,000 yuan (over $88,000) a day.
A police investigation later revealed that Zeng Lin’s store raked in more than 20 million yuan (about $3 million) in just one month.
She later told detectives that she began to suspect something was seriously amiss.
“With such high daily sales, I started to suspect that the cards were all being used to gamble,” the store owner said.
Zeng Lin told police her supplier was selling her cards and vouchers at a 9.85% discount. As sales rose, that increased to 9.9%, she said.
“When you deposit money on casino platforms, the operators recommend stores where you can buy [vouchers and gift cards],” a gambling suspect told police. “Zeng Lin’s store had the best reputation and a high sales rate, so I would choose her store.”
Redemption Platforms and Money Mules
Police say there has been a rise in so-called “redemption platforms” that cater to gambling rings.
These claim to let customers buy virtual goods from bona fide online retailers.
But by filtering payments through what police called “layers of complex back-end systems,” these platforms can also let customers swap e-commerce credit for cash.
This is where the money mules come in, detectives said. The mules lend their bank accounts to casino operators, who use these accounts to launder funds and eventually send the money to their own accounts.
The casino operators can also use the same system to pay out winnings, police said.
“If an online gambling platform receives a large number of cards and wants to cash them out in a short period of time, it can only do so through a redemption platform,” said an officer from the financial investigations team at the Neijiang Public Security Bureau in Sichuan Province.
Several police officers said existing e-commerce regulations are “practically ineffective” against this type of crime.
“Regulations only stipulate that card-issuing companies are responsible for monitoring card purchasers,” said an officer. “But they don’t require anyone to supervise what happens to these cards and vouchers after they have been sold.”
Police Hunt Illegal Gambling Dens
Earlier this month, several suspected Chinese gamblers sustained injuries when they tried to flee a police raid in Pattaya, Thailand.
Officers said three men leaped out of a second-floor window onto a hard-tile floor. Police described the illegal den as a “VIP gambling club.”
Illegal gambling den operators are also starting to congregate in abandoned buildings in Mainland China, police say.
Many use CCTV networks and paid lookouts to monitor for police, detectives added.
