Gambling takes hold in Guangdong as punters bet to escape poverty

Banned on the mainland since 1949, the underground gaming industry is more popular than ever despite regular police crackdowns, experts warn

PUBLISHED : Sunday, 02 March, 2014, 5:44am
UPDATED : Sunday, 02 March, 2014, 9:34am

In a village in Chaozhou in eastern Guangdong, where most residents earn their living cultivating oranges, at least half a dozen card tables line a short street.

The tables each seat up to 10 people competing in a local card game similar to blackjack. At noon, many women play cards for fun, placing small bets of maybe 80 yuan (HK$101).

At night, it's time for the men to play where the bets can reach 500 yuan and players can lose up to 1,000 yuan in minutes.

"You win, you would be eager to gamble. You lose, you would be even more eager to play," a resident said. "Each week-long Lunar New Year holiday, you can find many villagers in great debt because of gambling," she added.

Punters are catered for by a growing army of bookmakers, some of whom traded the drudgery of the assembly lines at local ceramics factories for the excitement of placing bets over the internet for a growing number of overseas and mainland clients.

"More than 60 per cent of the 60,000 people in my township gamble frequently, including local civil servants and teenagers," says one local bookmaker, a 29-year-old who only gave his surname, Wang.

The South China Morning Post was granted access to Wang and others by a village resident on condition the reporter did not identify herself and jeopardise the illegal business.

No one could give an exact figure for the amount gambled in Guangdong, but Wang estimated that in the township bets can total tens of millions of yuan in a single day. And that's just a fraction of Guangdong's underground gambling industry.

After state media exposed rampant prostitution in Dongguan, with 162 people taken away for questioning, the mainland's Ministry of Public Security ordered police nationwide to get tough on the "three vices" - prostitution, gambling and drug trafficking.

But gamblers in Guangdong remain unfazed, particularly those living in poor rural areas where dreams of winning huge jackpots override fears of arrest. Pensioners, young people, street vendors, businessmen, taxi drivers and migrant workers are all drawn to underground gambling according to residents.

Gambling was outlawed on the mainland after the Communist Party took power in 1949 but it's now more widespread than ever, said Dang Guoying, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences. Gambling is a tradition in rural communities and popular among migrant workers who like activities that bring them together.

"Villagers want to hang out outside. But there is no municipal park, no library, university or cinema nearby," he said. "Gambling becomes an easy way to have fun and hang out with each other."

But the police don't think gambling is harmless fun. Last year, more than 50,000 suspects were arrested across the country in a crackdown on gambling. The number detained was 7 per cent up on 2012, according to the Beijing Times.

A police official in Chaozhou, who declined to reveal his name, said about 160 people were arrested in the latest raid in the middle of February. "We launch a campaign against underground gambling annually," he said.

Each year, police smash hundreds of gambling gangs in Guangdong. But Wang and a local business owner said that with the gambling culture so entrenched, the authorities' efforts were hopeless.

And there are persistent complaints of police collusion with the industry.

"If you called the police to report an illegal gambling gang, I bet that half-an-hour later [the gamblers] would have been informed and would have dispersed," said Zhang Min, the owner of a ceramics factory in Chaozhou.

Wang agreed. "A pen, a piece of paper and a phone are all that a sub-bookmaker needs," he said.

Sub-bookmakers are tasked by a main bookmaker to cover a certain area.

Illegal gambling, especially betting on the outcome of Hong Kong's Mark Six lottery, has been a persistent headache for Guangdong since the 1990s. Betting has risen in recent years after the growth of Guangdong exports faltered in 2009, forcing many small factories to close.

"Five years ago, we took out bank and private loans to expand our production and plants. Now, about half of 150 local ceramics factories have shut down since the financial crisis and laid off a large number of local workers," said Zhang.

"Five years ago, many young people dreamed of setting up their own ceramics factory. Now, most of them are dreaming of getting rich by being a bookmaker or a private-loan lender."

The global financial crisis and the tightening of bank borrowing hit many local factories hard. "Ceramic production makes no money now," Zhang added.

Underground lenders borrowed money from former factory owners to set up gambling enterprises as the downturn took hold.

Betting on Hong Kong's lottery is popular. Although the lottery itself is only open to players in the city, bookmakers on the mainland offer high odds, inviting punters to win up to 700 times their original stake.

A man in his 20s sitting at a tea shop said that the older generation liked to gamble at card tables and place side bets on the lottery's outcome while young villagers bet online.

"Gambling is a way to earn quick money," he said. Workers earn between about 2,000 and 3,000 yuan a month working at a factory, but are faced with property prices that have risen to 5,000 yuan per square metre, he added. "Young people have no chance to earn and save enough money. We need money to marry, to buy an apartment."

Many young people in small cities and poor rural areas place online wagers as more bookmakers from Hong Kong, Taiwan and overseas have recruited jobless young people as sub-bookmakers. These local hires encourage neighbours and friends to bet through them on the internet.

Wang said he once worked on the assembly line of a local ceramics factory, earning about 2,500 yuan a month. He was recruited as a sub-bookmaker by rich private lottery bookmakers three years ago when more young people started to gamble. He now can bring home 20,000 yuan in a good month.

Wang added that a friend who had been recruited as a sub-bookmaker in 2010 recruited some of his relatives - including himself - who try to sign up their friends. Both sub-bookmakers and the agents receive up to 10 per cent commission on the stakes they collect.

And there's plenty of competition. Wang said there were hundred of agents like him in the township, and through them, people could place bets with offshore bookmakers by phone or on the internet.

In Guangzhou, Zhu Yinghua, a retired teacher, says she has had to fire three maids in the past two years because each was obsessed with gambling.

Each week the women would call bookmakers. Even though they earned about 2,000 yuan, they'd place several hundred yuan in a single bet, Zhu said.

"I was sick of listening to their worries about their gambling debts and their get-rich-quick dreams." She added: "But I think it's hard to find a non-gambling maid in the Pearl River Delta."

Betting is so open that some vendors at wet markets throughout Guangdong work as agents collecting stakes for bookmakers, she said.

"So many retired workers, street vendors, businessmen, taxi drivers and migrant workers now are drawn to underground gambling here."