Police in Hangzhou, Zhejiang province yesterday claimed to have arrested 11 people suspected of running an illegal gambling network, involving bets worth "more than 500 million yuan ($73 million)".
"The network acted as a bridge between Chinese gamblers and overseas casinos," Wu Jun, spokesman for the public security bureau of Xiaoshang district, Hangzhou, told China Daily.
"About 80 percent of the gamblers are local businessmen, and chances are that the money they bet came from their companies' accounts," Wu said.
The underground gambling network was set up by a 40-year-old wealthy local businessman surnamed Li in March last year, he said.
A Philippines-based online gambling site had asked Li to become their agent in the Chinese mainland, while he was gambling in Macao.
The gamblers could view real-time images of a casino in Philippines via the website and place bets through the agent's account.
Li registered with the website after coughing up a 5-million-yuan deposit last March.
Every time a gambler won, 17 percent of the winning amount would go to the website as a fee.
Li received 10 percent of the winnings as commission, while the person who introduced the gambler to the website got a 7-percent commission.
To maximize commissions, Li had to attract as many gamblers as he could to his virtual casino, which only consisted of a laptop with Internet connection.
Li ran the gambling network under a pyramid scheme. Gamblers were encouraged to bring in more people to join the website's network in order to earn more commission.
"Li had provided a convenient but illegal platform for wealthy businessmen, who wanted to gamble in Xiaoshan," Wu said.
"Otherwise they had to travel all the way to Macao to do so."
Under the current law, gambling is prohibited all over China, except Macao.
"This (setting up the gambling network) is the stupidest thing I've ever done," Li said in an interview with the Hangzhou-based Qianjiang Evening News.
"The whole thing started as a joke, but the joke went too far," he added. "I was not short of money, I was just being greedy."
Li said his normal annual income was around 3 million yuan.
According to Wu, the police uncovered the illegal network while investigating a local businessman, who fled without paying banks "hundreds of millions of yuan" worth of debt.
The cops later discovered the man lost most of the bank's money in Li's virtual casino.
Source: China Daily
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