Police in China smash hi-tech WeChat gambling rings that use counting robots

Police in China recently smashed another gambling ring that punted on virtual red packets on Tencent Holdings’ WeChat social media platform.

Since last year, Shenzhen authorities have arrested 71 people for gambling activities on Tencent’s WeChat and QQ platforms, with the largest sum involved at more than 60 million yuan, according to the official Xinhua News Agency. Similar cases were also reported in Jiangsu, Hunan, Yunnan, Guizhou, Sichuan and Zhejiang provinces. Tencent declined to comment on the report.

Handing out red packets, or hong bao, is a traditional way for celebration in China that has gone increasingly online in recent years. During the Lunar New Year period earlier this year, a total of 768 million WeChat users - or more than double the population of the US - sent or received hongbao via the platform, an increase of 10 percent from the year earlier, according to Tencent.

Sina’s Weibo launched the first digital red packets in the Lunar New Year in 2011. Since then, the feature has become a staple for many social media and communication apps, including Alibaba Group’s DingTalk. Alibaba is the parent company of the South China Morning Post.

There are numerous ways that one can gamble on red packets on WeChat, according to the Xinhua report. They range from the gambler having to pay out to everyone in the group if he or she snares the red packet with the smallest face value. One can also bet on the points. For example, a gambler who grabs a red packet of 12.07 yuan will receive 9 points by adding the last three digits of the red packet “2”, “0” and “7”. The person with the highest score wins the game and the points are converted into money when the game ends, according to Xinhua.