【Casino ohne deutsche Lizenz legal】Bet365 confirms plan to exit Chinese market

First reported by EGR, the privately-owned online gambling giant recently informed customers in an email that it plans to exit the Chinese online gambling market on Thursday (27 March).

It comes following a ramping up of enforcement against China-facing operators from the government in recent months.

A bet365 spokesperson told NEXT.io: “Bet365 continually reviews and assesses the markets to which it offers its services.

“The group has decided to align its focus to its core competencies in its core markets by consolidating its resources to centre on gaining market share in regions that provide long-term sustainable revenue.”

As a result of this, the spokesperson said the group would shortly cease operations in China as well as “various jurisdictions”.

Why is bet365 exiting China?

The news marks a significant shift for the secretive Stoke-based business, which has traditionally been known as one of the world’s largest grey market gambling operators.

The increased focus on locally regulated markets can be seen in the firm’s US expansion, where its grey market liabilities may have led to raised eyebrows with state gaming regulators.

Previous reports have suggested an unknown US entity compiled a dossier on bet365’s grey market activities in 2021, but that the document was ultimately shelved following a separate legal action.

The exit also follows news that bet365 has partnered with Major League Baseball’s St. Louis Cardinals, in an indication of its increased focus on the US market.

China itself had in recent months placed increased pressure on entities targeting its online market, including via diplomatic pressure and multinational law enforcement cooperation.

NEXT.iosources have said the increased enforcement has resulted in a much more treacherous landscape for Asian-facing businesses, especially those with Chinese staff or targeting the Chinese mainland.

Regulus: Bet365 now 90%+ regulated

Analysts at Regulus Partners said they believed China represented bet365’s last “dark grey” market, with the exit leaving the company with a domestically regulated mix of over 90% following the launch of Brazil’s legal market.

They said: “While China has long been an area of focus for bet365’s detractors (and jealous rivals), we believe that it has been waning in importance for over a decade. In 2014, China was probably bet365’s second largest market behind the UK, albeit given the company’s global reach this still meant less than 20% of revenue.

“A combination of a deliberate declining operational focus on China, increasingly effective state disruption, and growth elsewhere, puts the geography materially below 5% of current group revenue according to our analysis.”

Despite the exit, the analysts noted the continued value of the Chinese betting market, worth an estimated $20bn in revenue according to their analysis.

They added: “A combination of a much tougher enforcement environment in China and greater regulatory scrutiny elsewhere (including but not limited to the US), especially from an AML perspective, means that the risk-reward for accepting Chinese customers is very different now than ten years ago.

“Strict legal justification is no longer the sine qua non of operational risk, especially when lots of markets need localising — being an expert in creative payments and customer access solutions is both increasingly distracting and increasingly risky.”