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China Moves to Expand Gambling on Hainan

China announced plans to expand gambling in Hainan in a bid to help its ailing southernmost province. The planned expansion will include the development of horse racing and of an instant and sports lottery. According to experts, the move could eventually lead to China opening the door to casino-style gambling in the island.

Gambling is generally banned in China with very few exceptions. Just two types of lotteries are allowed within the country’s borders under current laws. Horse racing is allowed to a limited extent, while the provision of sports betting services is strictly prohibited.

Macau is currently the only place in China where casino gambling is legal. The special administrative region has kept its casino monopoly for decades and has drawn some of the world’s largest casino companies, including Las Vegas Sands and MGM Resorts International. It is believed that if the Chinese government softens its stance on gambling and allows casinos in other parts of the country, including Hainan, Macau could suffer its hardest economic blow since its gaming industry was established.

According to a reform approved by China’s cabinet on Saturday, it will support different projects that could help Hainan’s tourism industry and economy, including the development of horse racing. The document further read that the province should explore lottery products such as instant lottery and sports lottery on major international games.

Bloomberg reported in February that the Chinese government was considering the legalization of several forms of gambling in Hainan. Citing sources familiar with the discussions, the news outlet said that online gambling, horse racing, and lottery were among the options mulled by the President Xi Jinping-led cabinet. Online gambling was not mentioned in the reform agenda published on Saturday.

Rescue Plan

China’s support for expanded gaming on the island comes at a time when it desperately needs a heavy economic boost. Hainan has long been a popular tourist destination, annually drawing millions of tourists with its sandy beaches and resorts.

However, it is currently suffering a serious fiscal deficit as its largest conglomerate HNA Group Co. is embroiled in a debt crisis after a risky global expansion.

Aside from expanded gaming, the President Xi-promoted reform package includes different other initiatives aimed to draw interest from investors and help the island recover. Hainan will thus look to boost its tourism industry by increasing the number of international flights to the island and developing beach and water sports.

During a visit to the southernmost province, President Xi revealed that the reform agenda would include setting up a Hainan free trade zone by 2020, a ban on the sales of fossil-fuel vehicles, and development of artificial intelligence and virtual reality. These and many more were indeed included in the reform plan, published Saturday.

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