Xinhua's Xinhua Daily Telegraph published an investigation on 7 August 2025 into how illegal operators move online gambling money through third-party payment platforms, describing shell companies, "phone walls" and so-called fourth-party payment channels that let gamblers deposit and bet with little friction1.
The report says criminal groups use illegal intermediaries or technical means to register shell companies in bulk and open payment platform accounts, then "nurture" those accounts with large volumes of fake transactions so they qualify for T0 settlement, meaning incoming money can be moved out immediately1. The common method, it says, is a "phone wall" of many handsets controlling more than a thousand devices at once and simulating over ten thousand "normal transactions" a day, which the report says evades platform monitoring models and gets accounts classified as normal merchants1.
On a gambling platform reviewed for the story, users could "top up" by bank card transfer or third-party payment, with single payments through one payment platform ranging from 100 yuan to several thousand yuan, while the receiving accounts belonged to businesses listed as supermarkets, restaurants, digital products, home goods and consulting services, as well as personal accounts1.
The report cites a case concluded last year by the Beijing No. 3 Intermediate People's Court. Between 2019 and 2020, a defendant surnamed Wang, working with others in Beijing's Chaoyang district and elsewhere, built a payment and settlement platform without a payment settlement business license, using third-party payment platforms as the interface and aggregating payment channels, and used shell company accounts to provide illegal fund settlement services to gambling websites and other clients for fees. Settlement amounts reached more than 29 million yuan1.
"在未获得支付结算业务资质的情况下，伙同他人以第三方支付平台为接口，搭建支付结算平台"
The report also describes a case announced earlier this year in which a defendant surnamed Zhang, knowing he was assisting online gambling fund flows, gathered Wang, Jia, Zhao and Zhang in a residential compound to build a money transfer chain.
Judges told the outlet that people who use fourth-party payment platforms to collect funds for online gambling may simultaneously commit the crimes of illegal business operation and of assisting information network criminal activities, and if there was prior collusion with gambling criminals they may also be accomplices to gambling or to running a casino1.
The report says platform checks are weak. A Haidian district court official said some merchants registered as "technology companies" were in fact running gambling operations, or gangs used bought or stolen information to register fake accounts, and that platforms lack continuous monitoring of registered merchants1. Even where a company's business license has been revoked, a mini-program payment interface it applied for can still work normally, and in one police case some companies had been listed as abnormal by market regulators or had their licenses revoked while their payment accounts still received money1. A police officer said some payment institutions only require basic documents such as a business license and do not strictly verify actual operations, while gangs use photoshopped documents, buy "zombie company" records or buy accounts from individuals1.
A Chaoyang district court judge, Yang Ni, said personal accounts used for secondary settlement show patterns such as several small deposits in a short period, a single large outgoing payment, or frequent night-time payments, which monitoring can use to tell a normal user from a criminal tool1. The report adds that gangs use AI to analyze normal user trading habits and generate "normal-looking" data, and move funds through fake e-commerce transactions, crypto conversion or "running points" platforms in multiple layers, switching payment interfaces or platforms so that fund trails break and become hard to trace1.
What it means for players
For anyone gambling from china, the report describes a payment chain that is deliberately built to look ordinary: deposits may be routed to merchant or personal accounts that have nothing to do with gambling, and the receiving accounts can keep collecting money even after the company behind them has been struck off1. That matters because a deposit that reaches a gambling operator through a shell company or a rented personal account is a transaction Chinese authorities treat as part of a criminal money flow, and the report notes that tracing funds and recovering losses in these cases is difficult1.
The report does not say what happens to individual gamblers' accounts, and no figures on player losses beyond the cited cases have been reported. The mechanics it describes, including accounts showing frequent small deposits, single large withdrawals or night-time activity, are the same patterns judges say are used to identify criminal tools1.
What happens next
The report sets out recommendations rather than announced measures. A Haidian court official said industry rules should be updated dynamically to keep pace with how fourth-party platforms are abused, especially given how often they appear in online gambling cases1. Industry figures said payment institutions should tighten merchant onboarding, verify actual controllers with technology such as facial recognition, build dynamic risk ratings, monitor high-risk merchants more often, improve suspicious transaction detection and deploy AI risk systems that can automatically cut off problem merchants1. The report also calls for using typical cases as warnings and strengthening self-regulation in the payment and clearing sector1. No timetable or specific regulatory action is given1.
