defence against allegations of illegal gambling activities in China, the uk-based Bet365, one of the world’s leading online gaming companies has claimed that it does not break the Chinese gaming laws.
The company follows the statement of claims by a U.S. short seller company, Spotlight on Research, the company ran an illegal China-facing gambling site that potentially could be used to avoid China’s strict capital-control regulations. Spotlight has also claimed that Paysafe is an online payment processing company would be placed under legal scrutiny by the significant relationships with Bet 365.
According to the Spotlight, Bet365 gets a large portion of its revenues from Chinese customers and the gambling site is Paysafe’s largest customer. Paysafe brands Skrill (moneybookers), Neteller and Income Access is said that more than 50 percent of Bet365, the turnover from online transactions. The report pointed out that the BRITISH regulators would be able to shut down Paysafe over concerns that the transactions were in violation of China’s laws.
Responding to the accusations, Bet365 stated that the Spotlight-note is incorrect, misleading and self-serving. The company said that since it does not have an operational base in China, it was not breaking the law.
In a statement, Bet365 said:
Bet365 is a license to undertake the activities of the relevant regulatory authorities in various jurisdictions and is in compliance with all applicable legislation. There is no legislation that expressly prohibits the supply of remote gambling services into China by operators who are based outside of China. Bet365 has no people, assets or infrastructure in China and does not to all agents, distributors or other intermediaries, for any purpose, in China.
The company said that according to her, the Chinese laws do not extend to providing services without direct involvement with the region. Paysafe, which is listed on the London Stock Exchange, also issued a similar statement stating that the facts in the report are either incorrect or rather well known. It is also accused to be center of act of great importance. Spotlight has a short position on the Paysafe and could benefit from a decrease in the price of the share.
Despite the disclaimer, Paysafe the stock crashed after the report was released. It lost more than a third of its value in the first instance, before rallying and closing at 10 percent less than the previous day’s closing price.
It is not the first time that Bet365 is charged with the execution of China-facing activities. According to a 2014 media report, Bet365 was the bet on Chinese gamblers through opaque methods, such as the use of obscure domain names to prevent the stringent regulations of the government for gambling.