Chinese scholars are discussing the sensitive issue of legalizing games of chance on the mainland as a way to prevent the outflow of an estimated 600 billion yuan (565 billion Hong Kong dollars) a year to casinos and horse racing from Macau and Hong Kong.
Ironically, concerns about the disadvantages of gambling are also prompting scholars to set up a free national hotline for problem gamblers, a move that highlights Fortune's official awareness of the depth of interest in gaming. Discussions on the problems and possibilities of gambling are being conducted with the support of Peking University's Center for Chinese Lottery Research (CCLS), a government-approved agency established two years ago to gather scholars from many fields to focus on gambling-related policies and issues.
The center sponsored China's first international gambling conference in Beijing and Macau last week. In an interview, CCLS executive director Wang Xuehong said psychologists were arranging to train volunteers as hotline staff for problem solvers because of a series of media stories and letters about divorces, suicides and families who have become homeless due to excessive bets by addicted gamblers.
Wang estimated that China's underground casinos earn 10 times as much annually as 40 billion yuan collected from government lotteries.
The meeting was also attended by Wang Zhengxian, a lottery expert at Beijing University, who quoted state media as saying that mainland Chinese gamble on nearly 600 billion yuan in casinos and horse racing abroad every year. He urged authorities to curb underground gambling and develop a healthy and well-managed lottery industry as a "catalyst" for the country's economic growth.
He suggested testing casino operations in some areas before the government lifts its gambling ban nationwide.
Jia Kang, director of the Finance and Science Institute at the Ministry of Finance, said authorities should explore the relationship between the lottery industry and the nation's social and economic development.
With more and more freedom to travel, mainlanders are invigorating the casino industry in Macau and elsewhere. Jia urged the government to explore ways to further regulate and promote lottery activities on the mainland.
China first allowed civil affairs ministries at all levels of government to sell "welfare lottery tickets" 17 years ago, and then seven years later allowed sports ministries to create "sports lottery tickets" where people could choose the winner of a professional soccer match and win prizes.
The two lottery systems are now bitter rivals because most of the ticket proceeds are in ministries and support a significant portion of the budget.
Despite a series of lottery scandals, Wang Xuehong said that the Ministry of Education and other government departments also want to set up their own lottery to raise funds. However, Wang expects that the next phase of liberalization will include horse betting. More than a dozen tracks have been set up across the country, and the purebred industry has already established itself. Thinly disguised betting has begun, but the Beijing Jockey Club recently stopped racing because of police investigations.
Like lottery tickets, the legalization of casinos will take longer because almost all provinces and cities will want to have them because of their profit potential, Wang said.
When the Communist Party took control of the country in 1949, gambling was supposed to be eliminated as a social evil. Now it's all over again, just like capitalism itself.
Many poor people, especially migrant workers, often buy lottery tickets or visit illegal casinos.
Wealthy players visit casinos in Macau, but some spend more than they can afford.
Wang said China needs a network of treatment centers to provide direct, long-term help to problem gamblers. Beijing is gradually pushing to liberalize betting, seeing the ban as an acceptable transition that drives gamblers underground or abroad.
Wang said CCLS plans to develop a game management MBA program to support the industry's specialization.
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