Fuller Picture Emerges Over China’s Texas Hold’em App Ban

A couple of weeks ago, poker operators were dismayed to learn that the Chinese government had decided to impose a ban on social online poker apps and the promotions of poker tournaments via social media channels starting June 1st.

The announcement made by China’s Ministry of Culture subsequently led to a great deal of confusion as to why such a hardline approach was now being taken by authorities, with a clearer picture behind their rationale only emerging recently.

Directive Circulated in Local Media

According to a summary provided by Reuters news agency at the time, Chinese authorities demanded that gaming platforms stop offering Texas Hold’em games within the country, forbid services facilitating the transfer of virtual currency, and halt the publication of poker or gambling-related news on social media channels such as Weibo and WeChat. The Reuters piece further stated that Boyaa and Our Game had decided to withdraw their poker-related products ahead of the June 1st deadline.

Poker Apps Used as Gambling Medium

It would appear that for several years social poker apps have been used as a tool for facilitating real money games in China. The primary reason why the country’s Ministry of Culture decided to opt for a country-wide ban on poker apps, however, is apparently due to the difficulty associated with launching individual prosecutions against the tens of thousands of players believed involved.

The two main companies at the heart of the controversy are Boyaa Interactive and Our Game, who inadvertently or otherwise allowed their poker products to be used as gambling tools by permitting the purchase of free-play coin packages, and allowing players to create private, invitation-only games. This then contributed to a proliferation in
underground games in which “agents” held large amounts of real money deposited by players, and paid monetary rewards based upon these players’ online results.

Recruitment Advertising

In order to drum up real money business for their smart-device apps, social poker firms operating in China would broadcast their existence via popular Chinese social media platforms such as Weibo and WeChat. This subsequently explains why authorities decided to impose a wider ban on Texas Hold’em services being discussed or promoted via social media channels.

Players recruited were not limited to just China, though, and in February an article was published on HighStakesDB called “Chinese App – Bigger than PokerStars?” In the post, the piece’s author claimed that certain social gaming poker apps flying under the radar were contributing to the proliferation of high stakes online poker “clubs” in which “huge sums of real money” regularly changed hands between players each day.

According to the article, NLHE cash games would run with stakes equivalent to as high as $30/$60, with many well-known Western high stakes players regularly participating in the games. These games were only available using iPhones and iPads, with one player having allegedly won 1,500,000 CNY (US$200,000) during a single days play. Providing further insight into how agents would benefit from the arrangement, the HSDB post explained:

“The way the real-money clubs are working is that each ‘club’ is started and operated by an agent. Each agent is then responsible for taking and tracking the deposits and cashouts for his players. For his efforts the agent is then paid 5% of each winning player’s profits.”

Alerted Attention From Authorities

The HighStakesDB story may have attracted the attention of Chinese authorities, but game agents blatantly recruiting gamblers via services such as Weibo and WeChat would certainly have helped to confirm any suspicions that they may have had. In July 2017, a rather high profile news report was then released in the media outlet Xinhuanet connected to the online gambling crackdown, and as the article explains:

“Police in central China’s Hunan Province have cracked a case in which suspects used the instant messaging service WeChat for gambling. Police in Changsha City, Hunan’s capital, have detained 14 suspects in a case involving more than 13 million yuan (1.92 million U.S. dollars), according to a police statement on Tuesday. Beginning in January this year, one of the suspects, surnamed Hu, created WeChat groups to find gamblers. Up to 100 people were involved in the gambling case, police said.”

More recently, six employees at Our Game were amongst the 39 Chinese nationals arrested this month as part of the crackdown on underground real-money Texas Hold’em games being facilitated via smart-device apps.