The investigation began after police in the city of Taizhou of Zhejiang started getting complaints from people who say they were losing hundreds of yuan a day through a Wechat group.
Li Kangcheng, vice director of a local police station in the area, says their investigators decided to join the suspected group to follow up on the lead.
“The group had several hundred members. Sometimes, the gambling lasted round the clock.”
A ‘Hongbao’ or red envelope, is a monetary gift traditionally given during holidays or special occasions in China, such as weddings or the birth of a baby.
They are part of Chinese tradition.
A ‘Hongbao’ option opened on Wechat just before the Spring Festival last year, and became instantly popular among millions of Wechat users.
The program itself allows direct money transfers to individuals or puts cash up for grabs in a designated chat group.
In the randomized option, the sender decides how much to give in total, and to how many people, but then leaves it up to the app to allocate the money randomly.
Officer Li Kangcheng says the organizers of the gambling ring set up through Wechat established a special set of rules.
“The game started after the organizer sent out the first hongbao. The person who received the smallest amount in the first round would then have to send out the next envelope with at least 200 yuan.”
Police say organizers made profits by deducting at least 5 percent from every envelope.
Anyone who joined the group had to pay an initial guarantee of 100 yuan.
The players themselves took part by scanning 2-dimensional bar codes generated by by money senders.
Cheng Lingjie, divisional director with the Taizhou Public Security Bureau, admits gambling through Wechat poses a new challenge for police.
“The gambling on Wechat can be conducted everywhere and at any time. It’s easy to become rampant, given that it’s easy to join. A Wechat account and a cheap cellphone are enough.”
So far, eight suspects have been arrested for organizing gambling, with more than 10 million yuan involved.
Gambling on the mainland is illegal.
Organizers, both online and off-line, can face jail sentences of up to 3-years.
Non-organizers found taking part are often given non-criminal punishments.