Hong Kong Online Gambling Focused on Financial Technologies

The authorities in Hong Kong have thwarted an illicit online gambling activity that used 'emerging financial technologies to process illegal wagers worth US$64.5m.

On Monday, the Hong Kong Police Force's Cyber Security and Technology Crime Bureau (CSTCB) announced the arrest of 22 people accused of being involved in an illicit online gambling, football, and horserace betting activity that has been operating since May of this year.

Police reported that in only the last few months, the organization managed wagers worth HK$500m across a number of websites located in other countries. The arrested people, whose duties involved soliciting gamblers via online channels, were operating out of a variety of high-end condos in Hong Kong.

The inquiry, called 'Operation Moonshield', said the organizers persuaded an ever-increasing number of local people to open online bank accounts, which the organizers would then take charge of and transfer funds between the casino sites and their clients.

The organizers allegedly conducted payment collection by Hong Kong's Faster Payment System (FPS), mixing conventional bank aspects with mobile payment and digital wallet operations (such as Alipay and WeChat Pay). Users of FPS can move funds instantly in both Hong Kong dollars or Chinese yuan using only a QR code connected to their personal bank accounts.

It is unclear whether the connection to 'emerging financial technologies also includes any kind of cryptocurrency affecting the financial dealings of the organizers. In September, Chinese authorities on the mainland announced their first bust of an online gambling racket that used the crypto token Tether (USDT).

Traditionally, Hong Kong's online gambling bust has revolved around big foreign sporting competitions such as the FIFA World Cup or European Championships. But the Hong Kong Jockey Club, which maintains a local gambling monopoly, has regularly lobbied the authorities to ban globally licensed gambling operators that threaten clients in Hong Kong.

Occasionally, China and Hong Kong have partnered together to figure out illegal gambling operations, a relationship planned to expand closer now that Hong Kong has largely lost its freedom of authority in favour of closer cooperation with Beijing.