China Introduces New Online Gambling Regulations to Curb Excessive Spending

China unveiled new regulations on Friday aimed at curbing excessive spending on online gambling. This move marks the latest effort by the Communist Party to exert control over the virtual economy.

Impact on the Gaming Industry

The announcement led to a sharp decline in the share prices of leading Chinese gaming companies, Tencent and NetEase, on the Hong Kong stock market. Tencent shares plunged by 16% before partially recovering to close with a 12% loss, while NetEase's shares fell by 25%.

Details of the New Regulations

The regulatory body for gaming in China, the Administration of Press and Publication, has set forth new rules. These rules prohibit games from offering daily sign-up incentives or purchase-related incentives. Furthermore, they place limits on top-up amounts and include warnings against 'irrational consumer behavior.'

Previous Measures Against Online Gaming

Beijing has taken several actions against online gaming in recent years. In 2021, regulators decreed that children could spend no more than three hours per week on such gaming platforms. A state media outlet infamously dubbed online games 'spiritual opium,' harking back to the country's historical struggles with opium addiction.

In addition, there was a suspension in video game licensing approvals that lasted about eight months. License approvals only resumed in April 2022, as authorities eased a broader crackdown on the tech industry.

China, Regulations, Gambling