World

China, Philippines join forces to fight illegal gambling

MANILA/HONG KONG: China and the Philippines have joined forces to tackle illegal gambling, part of Beijing's broader campaign to curb illicit capital outflows and a pledge by Manila to weed out unscrupulous operators from the country's booming gaming industry.

The coordinated crackdown comes amid warming ties between Chinese President Xi Jinping and his Philippine counterpart Rodrigo Duterte, who has made illegal gambling the third front in his all-out war on crime, after drugs and corruption.

In their first joint exercise, Philippine and Chinese authorities cracked a transnational cyber gambling operation last month, shutting four illegal websites run out of the Philippines, arresting 99 people and freezing over 1,000 bank accounts, China's Public Security Bureau (PSB) said.

Mr Martini Cruz, chief of the Philippines National Bureau of Investigation's cybercrime division, said authorities were preparing more raids this month.

"We have been visited by Chinese police to crack down on these illegal gambling operators. They are also targeting possible fugitives who have made our country a sanctuary," he said.

So far, the crackdown has not targeted proxy betting, which is permitted in licensed casinos in the Philippines and has contributed to a boom in VIP revenues. Casinos there raked in nearly US$3 billion (S$4.2 billion) in overall revenue last year.

The practice, in which a gambler outside the casino gives instructions to an agent via an online platform, allows people to bet anonymously.

Industry executives have said increased scrutiny could impact the proxy business in the Philippines, particularly if it continues to ramp up ahead of the opening of Japanese slot machine tycoon Kazuo Okada's new US$2.4 billion casino in Manila in July.

LEGAL GREY AREA

While proxy gambling is banned in Singapore and in Macau, it operates in a legal grey area in the Philippines and officials tend to tread cautiously when discussing it.

Chinese law forbids citizens from gambling online and at home. The PSB has made repeated statements since March that transnational cyber gambling is harmful to the country's economic security, image and stability.

Yet proxy betting is growing at such a pace in the Philippines that Suncity, the top junket operator bringing in high rollers from China, told Reuters in April that 80 per cent of its business comes from proxy gambling and 20 per cent from customers travelling to casinos for live table games.

The proxy business in the Philippines is mainly facilitated by Macau junket operators who bring high rollers into the casinos' opulent VIP parlours, either in person or via proxies.

The junkets take on the risk for casinos, settling all credit and debt for the players in Macau, Hong Kong and China via their own internal banking networks.

For now, proxy gambling continues to boost the VIP coffers in the Philippines. - REUTERS

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