Bet365 & Paysafe Deny Allegations of Illegal Chinese Gaming Operations
Countering allegations of having illegal gaming operations in China, UK-based Bet365 one of the world’s leading online gaming companies has asserted that it wasn’t breaking Chinese gaming laws.
The company’s statement follows claims by a U.S. short seller firm Spotlight Research that the company was running an illegal China-facing gambling site which potentially could be used to avoid China’s strict capital control regulations. Spotlight has also claimed that Paysafe an online payment processing company would be placed under regulatory scrutiny due to its significant relations with Bet365.
According to Spotlight, Bet365 gains a major portion of its revenues from Chinese customers and the betting site is Paysafe’s largest customer. Paysafe’s brands Skrill, Neteller and Income Access are said to account for over 50 percent of Bet365’s revenue from online transactions. The report pointed out that UK regulators could shut down Paysafe over concerns that its transactions were in violation of China’s laws.
Responding to the allegations, Bet365 stated that Spotlight’s note was inaccurate, misleading and self-serving. The company said that since it did not have an operational base in China, it wasn’t breaking any laws.
In a statement Bet365 said,
Bet365 is licensed to undertake its activities by relevant regulatory authorities across a variety of jurisdictions and is compliant with all applicable legislation. There is no legislation which expressly prohibits the supply of remote gambling services into China by operators who are based outside China. Bet365 has no people, assets or infrastructure in China and does not engage any agents, aggregators or intermediaries, for any purpose, in China.
The company said that according to its view, the Chinese laws do not extend to those providing services without any direct involvement with the territory. Paysafe which is listed in London Stock Exchange also issued a similar statement declaring that the facts in the report were either inaccurate or previously known. It also accused Spotlight of acting out of vested interest. Spotlight holds a short position on Paysafe and could benefit from a drop in its share price.
Despite the disclaimer, Paysafe’s share price crashed after the report was released. It lost over one-third of its value initially, before rallying and closing at 10 percent less than the previous day’s closing price.
It is not the first time that Bet365 has been charged with running China-faced operations. According to a 2014 media report, Bet365 was taking bets from Chinese gamblers via opaque methods like using obscure domain names in order to avoid the stringent government regulations for gambling.
Posted on: 19th December 2016 by: Gary Beachley