An introduction to the legal aspects of illegal betting

17Aug2016

International and domestic crackdown on illegal gambling on the Euro 2016 Championship and the Copa d’America football competitions reached headlines this summer. In late July 2016 Hong Kong Police announced that HK$586 million was seized and 103 arrests were made during the European Championship from 10 June to 10 July 2016. Two Interpol cross-border operations during the Championships resulted in more than 4,100 arrests across 11 countries including China, France and Singapore; and crackdowns on certain illegal betting websites and call-centres in Asia . During the 2014 World Cup, the Hong Kong Police seized HK$750 million in illegal bets and arrested 176 people.

What is Illegal Gambling?

The current legal gambling age in Hong Kong is 18. All gambling activities are illegal except those expressly authorised by the Government  under the Gambling Ordinance (Cap. 148) (the “Gambling Ordinance”) namely:

  1. authorised horse racing and football betting  with the Hong Kong Jockey Club (the “HKJC”) and the Mark Six lottery, both authorized under the Betting Duty Ordinance (Cap. 108) (the “Betting Ordinance”);
  2. betting premises licensed by the Government (e.g. mahjong parlours licensed by the Home Affairs Bureau) or gaming at licensed premises e.g. restaurants and clubhouses where players do not play against a bank or at a charge; and
  3. gambling which exempted under the Gambling Ordinance such as social gambling where players do not play in the course of a trade or business.

“Gambling” is widely defined to include ‘gaming, betting and bookmaking’. “Gaming” refers to the playing of any game (whether one of chance or skill) ‘for winnings in money or other property whether or not any person playing is at risk of losing any money or other property’. Bookmaking refers to the ‘soliciting, receiving, negotiating or settling of a bet by way of trade or business’ by any means including express reference to online and telephone mediums, in light of the proliferation of online betting.

Locality of Gambling and Bookmaking

With the proliferation of offshore betting sites, in particular for football betting, section 8 of the Gambling Ordinance was amended to make it clear that it is an offence to bet in Hong Kong with an unauthorized bookmaker, regardless of whether the bookmaker is located in Hong Kong or offshore.

It is also an offence under section 7 of the Gambling Ordinance to engage in bookmaking both in Hong Kong and offshore (by receiving, negotiating or settling outside Hong Kong a bet which is placed from Hong Kong; or placed by a person who is in Hong Kong when the bet is placed).

Statistics

Whilst there are few statistics on the prevalence and overall turnover of illegal gambling, the HKJC’s Annual Report for the financial year of 2014-2015 reveals that legal football betting turnover was a HK$78.249 billion business (a 25% increase from the previous year) and amounted to 41.41% of the HKJC’s total betting turnover. The HKJC estimates that this is only a small fraction of the money involved in illegal gambling.

From 2011 to 2015, the Hong Kong Police successfully launched 140 raids against illegal football bookmaking on football and betting products (including horse-racing, football and Mark Six), with a betting turnover of $992 million in total. Interpol has carried out 5 waves of operations known as “Operation SOGA” for “Soccer Gambling” against illegal gambling in football from 2007 to 2014 resulting in more than 8,400 arrests, the seizure of almost USD40 million in cash, and the closure of some 3,400 illegal gambling dens which handled nearly USD5.7 billion in debts.

Maximum Penalties

The maximum penalties for unlawful gambling are on the following sliding scale:-

Conviction Maximum Fine Maximum imprisonment
First HK$10,000 3 months
Second HK$20,000 6 months
Third HK$30,000 9 months

The offence of bookmaking is punishable by a maximum fine of HK$5million and imprisonment for a maximum of 2 to 7 years depending on whether the conviction is summary or indictment. As noted by the Court of Appeal in HKSAR v Lee Wai Yiu [2007] HKEC 1112, ‘Bookmaking itself is an offence which, when conducted on a meaningful scale, attracts an immediate custodial sentence. It is a very substantial industry‘.

In many cases it is the proceeds of illegal bookmaking that prosecutors pursue through money laundering offences under s. 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455. The Court of Appeal in Lee Wai Yui added that  ‘those who assist bookmakers by providing a conduit for the large sums of money that are generated provide the bookmakers with an invaluable facility’.

Tanner De Witt is a proud sponsor and supporter of a range of sports in Hong Kong; this includes the Hong Kong Rugby Football Union, the ESF Lions Youth Football Team and various boxing and golfing events. The lawyers at Tanner De Witt are well versed in the concerns of both sports administrators and regulators on one hand and those of the players and staff on the other.

For those interested in understanding more about gambling offences and who wish to seek legal assistance in the event of a police investigation, please contact:

Kim Boreham
Partner | Email

Philip Swainston
Consultant | Email

See also: An introduction to the legal aspects of match fixing in sport (Article published 17 August 2016)

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.