China’s Multibillion-Dollar Pastime

Bettors beware. A June 20 newspaper report from Haikou, the capital of Hainan island — sometimes called China’s Hawaii for its palm-studded beach hotels — reported the story of a local 32-year-old mother who lost more than $16,000* betting on the FIFA World Cup, approximately four times the annual salary in Hainan. Despairing over the debt, which she could not repay, the woman, identified only by her surname Wang, checked into a hotel with her three-year-old child and penned a suicide note explaining that she couldn’t face her family after what she’d done. The Haikou Evening Post wrote that she shut herself in the bathroom, set up a small clay stove, lit a pile of charcoal, and waited. She soon died of carbon monoxide poisoning, according to the report, although the child was unharmed.

Police in the Chinese metropolises of Beijing and Shanghai are no doubt thinking of stories like this as they post warnings on social media imploring people to stay away from World Cup gambling. Despite China’s notoriously disappointing team failing again to win entry into the tournament, and notwithstanding the fact that live matches air at midnight, 3 a.m., and 6 a.m. China time, that hasn’t stopped Cup fever from sweeping a nation that loves its soccer. The New York Times reports that during the last World Cup in 2010, 17.5 million Chinese watched every match, more than any other country. Unfortunately, many Chinese love to gamble just as much as they adore soccer. The two are a potentially dangerous mix.

On June 19, Public Security Bureau officials from the Shanghai neighborhood of Jiading tried to drive their message home with a slideshow of staged selfies that showed a man’s hand resting on the steering wheel of a Cadillac, then several progressively cheaper brands, including a Volvo, then the wheel of a tractor, then a rusty motorbike parked amidst alleyway rubbish. The final image showed the tips of two sneakers, perched on the ledge of a high building, the protagonist ostensibly poised to jump. The accompanying message: Soccer should be fun, but for those who make it their living, "the World Cup can turn into a world of sorrow." A Beijing police public service announcement, posted June 21 on Weibo, was less creative but echoed the same message. Don’t go sleepless and don’t pick fights, it read, but, most importantly, don’t fall into the trap of gambling. "It won’t make you rich, but it can certainly change your life."

Official warnings like these obscure the fact that Chinese authorities have taken an increasingly schizophrenic view of sports gambling. While the government cracks down on gambling dens and illegal online betting parlors, it also runs an official sports lottery that gives 22 percent of payouts to social causes such as sports education and welfare. Sports lottery tickets are sold at grocery stores and newspaper stands around the country and are increasingly available online and via mobile devices. During the last World Cup, China spent just $1 on legal lotteries for every $10 its citizens spent on illegal gambling, prompting calls from experts and the public for the government to legalize more varieties of gambling. The Ministry of Finance authorized online lottery sales in 2010 and licensed sites to sell sports lottery tickets in 2012. That helped spur Chinese punters to spend more than $21 billion on official sports lotteries in 2013, a 20 percent increase from the year before, the government-run China Daily reported. 

Reform of legal lottery sales has brought more money into Chinese government coffers, but illegal betting, which offers better odds, continues to be rampant. CalvinAyre.com claims China’s illegal sports betting market is worth around $97 billion a year.

In a bid to poach some of that black market enthusiasm and recruit new bettors, licensed Chinese lottery providers shifted their marketing into overdrive ahead of this year’s World Cup. Shenzhen-based and U.S.-listed sports lottery site 500.com offered $16 million to anyone who could predict the outcomes of all 63 World Cup matches.

The effort appears to be paying off. CalvinAyre.com, which tracks the online gambling industry, reported June 15 that the first day of the 2014 World Cup brought in five times the legal sports lottery sales recorded for the first day of the last World Cup in 2010. According to state-run China Daily, popular Chinese retail website Taobao.com reported more than 4 million bets via their online platform on opening day of the World Cup, and 6 million bettors by the third day. Microblogging site Weibo bristled with posts about World Cup wagers, with some liveblogging their bets. One sneaker wholesaler included screenshots of the wagers he made using Taobao’s lottery app on his mobile phone. When he lost $320 betting against the Netherlands in their match with Australia, he posted six sobbing emoticons (but added he was still up overall). Others newbies were reeling harder from their losses and forswearing the practice. One user from southern Guangxi province wrote on June 21, "I’ve lived this long and never seriously gambled; I don’t even play online card games." But this time, she wrote that she had chosen to bet, ultimately losing all of the money on her bank card. "It’s a profound lesson: gambling is a killer."

*Correction, Jun. 24, 2014: This article originally misstated the amount the woman surname Wang lost gambling. It was approximately $16,000, not $1,600. (Return to reading.)