The Supreme Court releases the "Research Report on Cross-border Gambling Governance Issues"
Recently, the Fifth Criminal Tribunal of the Supreme People's Court issued the "Research Report on the Governance of Cross-Border Gambling" (hereinafter referred to as the "Report"). The "Report" stated:
Cross-border gambling illegal crimes are becoming increasingly serious, seriously disrupting social management order, and seriously endangering my country's economic security and social stability. The current cross-border online gambling presents the following characteristics:
01-Cross-border gambling crimes show a diversified trend
Online gambling has the characteristics of low operating costs, servers located overseas, convenient fund settlement, and easier evasion of crackdowns. Gambling groups have begun to shift their gambling business from offline physical casinos to online covert operations, and continue to develop promotion agents and utilize regional gambling. Emerging technologies such as blockchain, encrypted communications, and virtual currencies evade attack. Casino gambling and online gambling are deeply integrated, and the forms are gradually diversified.
02-The upstream and downstream black and gray industries present a "multi-format" trend
Cross-border gambling has a long illegal and criminal chain, and its technical support, payment and settlement, promotion and drainage and other links have spawned a large number of upstream and downstream black and gray industries such as information network crimes, infringement of citizens' personal information, underground banks, and money laundering. Offline, such crimes involve departments in the fields of tourism, labor, and entry-exit management. Online, it also involves financial management, cross-border data, network management and other fields.
03-Cross-border gambling crime cases are generally on the rise
The number of cross-border gambling crime cases has increased significantly since 2021. Although it has declined in 2022, it is expected to remain at a high level in 2023. Among them, the use of the Internet to open cross-border casinos has a high incidence of crime, frequent major cases, high amounts of money involved, and great social impact.
New technologies such as blockchain and virtual currency are widely used in online gambling
With the rapid development of the Internet, criminals have "moved" gambling tables to the Internet, pushed gambling-related information through various channels, and solicited gamblers to participate in gambling.
According to relevant statistics, there are more than 10 million users participating in online gambling in my country, and more than 1 trillion yuan of gambling-related funds flow out of the country every year. Because cross-border online gambling has low thresholds, many ways to play, and supports multiple payment methods, a large number of people are attracted to participate in gambling.
In order to avoid supervision and crackdown, online gambling has targeted blockchain and virtual currencies. The "Report" also pointed out that cross-border online gambling uses emerging technologies such as blockchain, encrypted communications, and virtual currencies to evade crackdowns.
According to Chengdu Lian'an's "2022 Global Virtual Currency Crime Situation and Combat Research Report", in practice, virtual currency and blockchain technology are used as payment settlement tools and gambling betting objects in gambling.
01-Virtual currency as a payment and settlement tool for gambling chips
Using virtual currency as chips is a common scenario in online gambling. It is roughly divided into the following two modes:
① Gambling websites collect virtual currency as gambling funds on their own
Gamblers can follow the method guidance provided by the gambling platform, purchase virtual currency by themselves and recharge it to the account address provided by the gambling website, or they can recharge gambling funds through the wallet app built by the gambling website.
② Gambling websites collect gambling funds through the USDT benchmark platform
The USDT benchmark platform provides the acceptor's bank account to collect RMB and sell virtual currency. After the transfer, the virtual currency will be directly transferred to the gambling platform account.
02-Leverage contract trading using virtual currency as a gambling object
In addition to being used as gambling chips, virtual currency can also be used as a betting object, that is, using the rise and fall of the virtual currency market price to set up leveraged contracts.
03-Develop gambling applications using blockchain smart contract technology
How to gain the trust of gamblers is a difficult problem for gambling platform operations. Smart contracts write gambling rules in the form of code on the blockchain. They are open and transparent, cannot be tampered with, are automatically executed, and cannot be intervened. This problem can be solved by many platforms. Using smart contracts to open online casinos.
04-Blockchain + game implements gambling
Adopt a "game + blockchain" approach to implement "guessing and betting" gambling behavior. For example, "game + blockchain" projects such as "horse racing", "slot machines", and "black pool trading" have induced a large number of domestic users to participate.
Characteristics of gambling involving virtual currency
Through our assistance in combating cases involving virtual currency gambling, we found that current gambling involving virtual currency has the following characteristics:
01-USDT becomes the mainstream gambling payment method
At present, overseas gambling websites generally provide a variety of payment methods, but in order to avoid supervision, virtual currencies, especially USDT, have gradually become the mainstream payment and gambling settlement method for overseas gambling websites.
02- Carry out gambling activities through foreign social groups
In addition to overseas gambling websites, some foreign social groups are also gathering places for virtual currency gambling. This kind of gambling activities gathered in social groups are generally small in scale, ranging from a few to dozens of people. They may exist for a long time, or the group may disband after one gambling activity. This type of group is highly concealed, highly mobile, and difficult to investigate and investigate.
03-Gambling-related gambling funds have a large span
Generally speaking, the amounts involved in overseas gambling websites are relatively large, and the turnover involved may exceed tens of billions or hundreds of billions. In some cases, gamblers have lost more than ten million. The amount of virtual currency gambling hidden in social groups is relatively small.
Challenges in combating online gambling involving virtual currencies and other governance challenges
At present, online gambling involving virtual currencies has become the focus of public security agencies’ prevention and crackdown. However, whether it is used as a payment and settlement tool or as a smart contract for gambling rules, the application of blockchain technology in the field of online gambling has increased the difficulty of detection and identification. Case handlers are required to have corresponding knowledge and technical reserves.
The "Report" also pointed out the current challenges in combating online gambling crimes involving new technologies such as virtual currencies:
01-It becomes more difficult to crack down on governance
Cross-border factors have become an important constraint in combating gambling-related crimes. Some gambling criminal groups and gangs have moved to set up bases overseas, taking advantage of the gaps in the legal systems and social governance capabilities of different countries and regions to evade crackdowns, making it difficult to file cases, obtain evidence, and freeze and seize funds involved in the cases.
At the same time, some payment services that integrate multiple payment service methods such as banks and third-party payments have emerged, which has also increased the difficulty of combating governance.
02-Case trials become more difficult
Cross-border gambling crimes are networked and operations are grouped, resulting in cases involving a large number of people, covering a wide area, and involving large amounts of gambling funds.
In recent years, the number of major cases has increased, and there are many related cases, which are handled by judicial authorities in different regions, making overall guidance difficult.
03-Coordination becomes more difficult
Cross-border gambling crimes have deep social penetration, long criminal chains, strong concealment, difficulty in obtaining evidence, and many procedures involved. The linkage mechanism needs to be improved:
First, unified standards are needed for investigation and evidence collection and evidence review;
Second, procedures such as designated jurisdiction and property inspection and freezing disposal need to be strengthened;
Third, a large number of issues involving confession and punishment, application of suspended sentences, non-prosecution, and execution docking need to be understood in a unified manner.
04-It becomes more difficult to apply the law
At present, the more prominent legal application issues mainly include: ① The definition standards of the crime of organizing and participating in overseas (overseas) gambling and the crime of opening a casino are not clear. The objective behaviors of the two crimes are intertwined, and it is difficult to distinguish and apply them. ② The applicable standards for “huge amount” and “serious circumstances” of the crime of organizing and participating in overseas (overseas) gambling are not clear. The crime of organizing and participating in overseas (overseas) gambling is listed in Paragraph 3 of Article 303 of the Criminal Law. The provisions of the Criminal Law do not directly The statutory penalty is stipulated, but it is expressed as "punishment in accordance with the provisions of the preceding paragraph", which is an invocation of the norm. Compared with the penalty provisions for the crime of opening a casino, the degree of clarity of the norms invoked in this crime is lower. ③There is an imbalance in the application of the law in the "serious circumstances" of the crime of opening a casino
The Criminal Law Amendment (11) changes the maximum penalty in the first level and the minimum penalty in the second level of "three years' imprisonment" to "five years' imprisonment" for the crime of opening a casino. Due to the continuous expansion of new gambling methods and the scope of gambling participants, the amount of gambling funds for this crime can easily accumulate to the "serious circumstances" standard of profit of more than 30,000 yuan stipulated in the "Opinions on Several Issues Concerning the Application of Laws in Handling Online Gambling Criminal Cases", resulting in The number of defendants sentenced to prison terms of more than five years has increased significantly.