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CCTV Accuses Shanda Subsidiary of illegal internet gambling
Posted 3/25/11 : China Central Television exposed what it claimed was illegal online gambling activities on its “Topics in Focus” program last week, claiming that a player had revealed that Shanda Interactive subsidiary Bianfeng Group had facilitated online gambling for real money.
In an episode titled 'Dangerous Game,' the television program reported that a Shanghai-based player referred to as Wang, in seven separate rounds of Bianfeng's leisure game "Hong Kong Poker," lost a total of nearly RMB 767,000 (around US$ 116,854.47).
The CCTV report accused online games provider Bianfeng of running an online gambling operation with "Five Card Hong Kong Poker," noting that online gambling was banned in 2005 by China's General Administration of Press and Publication in its "Notice Pertaining to the Prohibition of Gambling Activities in Online Games."
The program speculated on whether Bianfeng promotes the use of illegal virtual currency, both through its tacit approval of virtual currency in the game being exchanged for real money, as well as profiting from black market virtual currency exchanges.
Bianfeng responded to the report by announcing that the game in question had been taken down, and that an internal enquiry into the allegations had been launched, according to a follow up report on ichinastock.com.
Interviewed by the presenter, the player alleged that advertisements for virtual money changers were widespread, and transactions were made across Bianfeng's platform.
Wang said that players would deliberately lose in order to transfer virtual currency to the money changer, who would then transfer RMB funds via Alipay.
In-game virtual currency could be purchased at RMB 125 for a million points, but conversely a million points could only be exchanged for RMB 70. Transactions can range less than a few million or over 400-500 million, and are easily visible to Bianfeng, he claimed.
"While Bianfeng claims to be against online gambling, they turn a blind eye to the virtual currency black market," said Wang, who also claimed that Bianfeng takes a 1 percent cut from each transaction the virtual money changers make.
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