International law firm Bird and Bird has released a bulletin that offers an in depth look at the Gambling (Amendment) Ordinance, which essentially outlaws all forms of bookmaking with residents of Hong Kong and makes it an offense facilitate advertising for online bookmaking services.
Amendments to Hong Kong's gambling laws had been in the works since November of 2000. The current gambling laws have been through 18 drafts and political maneuvering, which have lead to three key provisions.
The first provision, made to Section 2, clarifies the definition of "bookmaking," which is extended to target those who manage or control the operation of gambling Web sites. Now the definition is inclusive of soliciting, receiving, negotiating or settling a bet by way of trade or business whether personally or by letter, telephone, telegram, online medium (Internet) or by any other means. If arrested, bookmakers could face a fine of $5 million as well as imprisonment of seven years.
The second provision, in Section 7, makes the offense of bookmaking extra-territorial, meaning that the
acceptance of bets from inside or outside Hong Kong is now illegal. Even for Web sites that are hosted outside of Hong Kong from individuals who are in the city at the time the bet is placed is illegal. This makes bookmaking two separate offenses: one for the punter and the other for the actual Web site where the bet is placed.
The third provision, to sections 16A and B, establishes a new offense of promoting or facilitating online bookmaking, outlawing the advertisement of bookmaking or betting inside or outside of Hong Kong. The provision is inclusive of advertisements published over the Internet, whether on a Web site or in an e-mail.
Hong Kong police have the power to gather evidence where it is available from within Hong Kong. Authorities will face a difficult task, however, in enforcing the legislation against operators based overseas in countries where the activity is legal.
The ordinance went into effect May 31, 2002 and covers conduct on or after this date. The ordinance does, however, outlaw bets placed prior to May 31, making them illegal to collect or pay out. For example, bets placed on the World Cup prior to May 31, will be illegal to pay out or collect.
Although the new ordinance went through numerous drafts, its final form does not cover all online gambling activities. Depending on the business model and structure, Bird & Bird reports, it may still be possible to continue dealing with Hong Kong punters without breaching the new law. However, accepting bets as part of a commercial enterprise in most cases will be illegal.
Bird & Bird is an international law firm providing a full range of commercial, corporate, and dispute resolution services in the specialist practice areas of information technology, communications, e-commerce, media, sports, intellectual property, as well as pharmaceuticals and life sciences. The firm has substantial experience in the gambling industry due to its dealings with sports practices and e-commerce sectors of the Internet. The firm has offices in Hong Kong, London, Paris, Brussels, Stockholm and the Hague.
Click here to view the Bird & Bird bulletin.