Chinese online content platforms including Tencent Music and NetEase’s Cloud Music have removed live streaming features that analysts say could be used for illegal gambling, at a hefty cost to their quarterly revenues, Reuters reported.
According to comments made to the news platform, online content platforms pulled the plug on features such as virtual lucky draws after the government in June started cracking down on live streaming, as part of a wider clampdown on online gambling.
Popular lucky draws are often manipulated by live streamers colluding with viewers to share the prize, with analysts pointing out that these features have increased the popularity of live streaming, a market which was worth around RMB152 billion ($21 billion) in 2022, research firm Analysys said.
In their second-quarter earnings posted last week, Tencent’s online music arm Tencent Music and its Twitch-like game broadcasting platform Huya said their social entertainment revenues, which include live streaming, declined by 24 percent and 16 percent compared to the same period a year ago.
None of these companies mentioned the gambling crackdown when they reported their earnings, and they did not respond to request for further comment, Reuters pointed out.
China’s Ministry of Public Security announced last month that public security bodies will continue to crack down on gambling in rural areas and improve oversight to prevent such crimes.
The state security body revealed that during the first half of this year, police dealt with 10,000 criminal cases and 75,000 administrative cases related to gambling in rural areas, and confiscated RMB740 million ($104 million) in related funds as part of a nationwide crackdown.
Qi Xiguo, an official with the ministry’s public security administration bureau stated that gambling gangs often set up mobile casinos in remote mountain areas, abandoned factories, on farms and in interprovincial, intercity and intercounty border zones where supervision is lacking.
The ministry has created a monitoring mechanism, setting up regular monitoring stations in 101 districts and counties across the country, Qi said.
A nationwide crackdown on cross-border gambling ended with 37,000 cases related to cross-border gambling solved in 2022, more than 2,600 online gambling platforms and 1,100 physical casinos shut down, and 1,200 illegal technical service teams busted, according to the Ministry of Public Security.