News

Tuesday, 03 November 2009 23:11

In response to a growing problem with foreign online gambling companies operating in the country, the regulator for online video gaming in China, the General Administration of Press and Publication (GAPP) is currently taking steps to tighten the noose around the industry by effectively banning all forms of foreign participation in their market. This represents the potential loss of a considerable revenue stream for several Internet gambling operators who are ambitiously targeting their brands in China.

The Wall Street Journal's online blog broke the news earlier this week, reporting on the banning of foreign investment coming into China's domestic online gambling industry. Foreign investments by completely foreign owned enterprises, cooperatives and joint ventures in the Chinese online game operations have also been banned. Added to these are foreign investments that are interpreted as indirectly influencing Chinese owned online gaming companies, such as those companies which provide technical support.

This appears to be an expansion of China's drive to remove access by its citizens to what it considers unhealthy or illegal online content. In July, China's Ministry of Culture were reported to have outlawed all games featuring gangster themes or similar mafia-like gang activities.

Kou Xiaowei, who is the Gapp's technological and digital department's vice director, is reported to have said that in recent years there have been some foreign companies that have tried to become involved in the industry for online gaming in China using a variety of forms. This has caused a high level of disorder in this industry in China. The implication is clearly that foreigners are seen as having perpetrated the creation of many games that contain questionable content.

According to Chinese press sources, some 45 of the domestic online game operators have already been punished for violating the regulations.

To enable an online games company to operate in China, they must first be granted a permit and that can only be obtained from GAPP. However, once approved and a permit granted, a company can put games online without the need for any further permission from other government departments.

Last month, a notice was issued to clarify the responsibilities of the relevant state departments with regards to the regulating of online gaming. The responsibility of the Ministry of Culture lies in market supervision, while GAPP is responsible for managing the process for pre-approval prior to the release of online games.