All questions

Legal and regulatory framework

The main legislation governing gambling in Hong Kong is the Gambling Ordinance (Cap. 148). The general position is that gambling is unlawful unless the act falls within one of the exemptions under the statute. The definitions of various key terms are laid out under Section 2. Gambling is defined to include 'gaming', 'betting' and 'bookmaking.' Historically, the law is targeted towards gambling at unlicensed establishments and betting with illegal bookmakers. Private bets, gaming carried out in private premises on social occasions and certain types of games carried out in licensed premises on social and non-social occasions are not unlawful under the Gambling Ordinance.

iGaming

A 'game', which is one form of gambling, is widely defined to include 'a game of chance, a game of chance and skill combined and a pretended game of chance or chance and skill combined' and 'gaming' is defined to mean 'the playing of or at any game for winnings in money or other property whether or not any person playing the game is at risk of losing any money or other property'. Under these wide definitions, whatever activities where an element of chance is involved and the participants stand to win something will be a form of gambling, and will, therefore, be unlawful. One classic example of a game is a lucky draw, which is also a lottery. To lawfully conduct the game, the organiser has to obtain a licence and fulfill the conditions of the licence in conducting the game.

By the same token, a game played on an online gambling platform or virtual casino, which offers the players a chance to win money or other property falls within the definition of a game. However, a person who takes part in online gambling will usually do it at home in front of his or her computer, so the person cannot be charged with the offence of gambling in a gambling establishment under Section 6 of the Gambling Ordinance, where 'gambling establishment' is defined to include 'any premises or place, whether or not the public or a Section of the public is entitled or permitted to have access thereto, opened, kept or used, whether on one occasion or more than one occasion, for the purposes of or in connexion with unlawful gambling or an unlawful lottery'. Although Section 13 makes it an offence for someone to gamble in a place that is not a gambling establishment, one crucial element is that the place where the gambling takes place must be the place where the other person operates or manages or otherwise controls the unlawful gambling. In the case of online gambling, the physical location where the online gaming operator controls the gambling, usually in a jurisdiction where such operations are legal, will not be the same place as where the punter gambles. Theoretically speaking, both the operator and the punter can be in the same physical location in Hong Kong when the online gambling takes place, but it is only in this unlikely and narrow scenario that the statute can be applied against them.

For these reasons, there seems to be a loophole in the current legislative framework as regards online gambling (as opposed to betting, which is specifically regulated under the same statute), as historically the law was drafted to regulate traditional gambling activities where people have to be in front of each other in a physical location. Although one cannot safely assume playing poker or a casino-style game online at home, where real money is at stake, is immune from prosecution, it is at least questionable which specific offence is committed under the Gambling Ordinance in that situation.

In recent years, whether or not electronic sports is a form of gambling has become a hot topic. As the definition of a 'game' is 'a game of chance, a game of chance and skill combined', the sport concerned will not be a game if the playing of which is purely based on the player's skill and not chance and skill combined. For instance, a ping-pong game played on a ping-pong table is not a game because its outcome is solely based on the skill of the players, notwithstanding sometimes sports players will attribute the outcome of a match to their 'luck'. This is in contrast with someone's luck in a lucky draw where the participants have no control in the results at all.

iiBetting and bookmaking

The legal position on betting is much clearer. The Gambling Ordinance under Section 8 specifically prohibits betting with a bookmaker, whether or not the bet is received within or outside Hong Kong. Unauthorised bookmaking is also a crime in Hong Kong, but the law specifically provides that betting with a bookmaker authorised under the Betting Duties Ordinance (Chapter 108), (i.e., the Hong Kong Jockey Club) is lawful. As such, the only way to lawfully bet with a bookmaker in Hong Kong is to patronise the Hong Kong Jockey Club.

Betting with overseas bookmakers, even if they are legal in the jurisdiction where they operate, is an offence regardless of how the bet is placed. In practice, however, it is difficult to see how law enforcement can meaningfully crack down on this type of illegal betting given the ease of making a phone call and gaining access to the internet. The law seems to be more effective in deterring overseas bookmakers from soliciting business in Hong Kong, as most prominent bookmakers will deny access to their platforms if they detect that the users are accessing their webpage from Hong Kong.

iiiWager

A 'bet' can also be made between persons where none of them is a bookmaker, which is not prohibited by the Gambling Ordinance. This type of bet is more formally known as a 'wager'.

'Wager' is not defined in the Gambling Ordinance. As a common law jurisdiction and a former British colony, Hong Kong benefits from a rich body of case law applicable to gaming contracts and their enforcement. Traditionally, the courts had been asked to determine disputes relating to a 'wagering contract,' which is not defined in any statue. The term 'wagering' has been described judicially in Carlill v. Carbolic Smoke Ball Co [1892] 2 QB 484 as:

A wagering contract is one by which two persons professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependent upon the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any interest in that contract than the sum or stake he will so win or lose, there being no other real consideration for the making of such contract by either of the parties.2

This judicial description of wager, or bet, should not be treated in the same way as a statutory definition. It is possible that the meaning of the word will be reinterpreted or redefined in other cases. While this judicial definition of a wager is limited to a contract between two persons, the position in Hong Kong is that a bet made between two or more persons is lawful provided that none of the parties to the contract is a bookmaker or does it as a trade or business. As such, where there are more than two persons participating with their stakes forming a common fund to be paid over to the winner, such multipartite arrangement is lawful if none of the parties is a bookmaker.

At common law, betting is not illegal and a wagering contract is enforceable provided that it does not incite a breach of the peace and is not immoral or otherwise contrary to public policy. This is in contrast with some jurisdictions where a wagering contract is made unenforceable by statute.

ivContract for difference

A 'contract for difference' is defined in the Gambling Ordinance to mean 'an agreement the purpose or effect of which is to obtain a profit or avoid a loss by reference to fluctuations in the value or price of property of any description or in an index or other factor designated for that purpose in the agreement'. The Gambling Ordinance does not apply to any contracts for differences that are listed on any specified stock exchange or traded in any specified futures exchange.