Bet365 announces its withdrawal from China

Bet365 has revealed it will be quitting the Chinese market on 27 March, with “a business decision” given as a reason for the exit.  

The family-owned operator first announced the move via the bet365 Help’s account on social media platform X, when replying to a user asking why Chinese operations were due to close.

The bet365 account noted that as of 27 March, the operator will “unfortunately no longer be providing our services to customers residing in China”.

The post also stated that China-based customers will be able to access their accounts until 30 April, after which they would need to contact bet365 to make a withdrawal.

In another response to a different X user, the same bet365 Help account said the reason for exiting China was “a business decision”.

Bet365 has since confirmed to EGR that it is shuttering Chinese operations to focus on taking market share in its core markets.

In a statement, the firm said: “Bet365 continually reviews and assesses the markets to which it offers its services.

“The group has decided to align its focus to its core competencies in its core markets by consolidating its resources to centre on gaining market share in regions that provide long-term sustainable revenue.

“As a result, bet365 will shortly cease operations into various jurisdictions including China.”

EGR has asked the company to clarify which various jurisdictions besides China it plans to exit, but are yet to receive a response at the time of writing.

Gambling is all but illegal in mainland China, bar a few state-controlled options such as lotteries. Special administrative regions Macau and Hong Kong both have more liberal gambling laws.

However, foreign operators have been reported to use mirror sites in the Asian nation, in a bid to bypass laws.

Mirror sites are clones of betting sites but with altered and obscure web and IP addresses to circumvent blocks.

A report by Business Insider in June 2022 on the scale of online gambling in China claimed bet365 and its subsidiaries were operating 59 mirror sites.

At the time, bet365 told the publication it didn’t believe operating in China was illegal and that penalties introduced by the Chinese government did not alter the group’s position.

The global online bookmaker’s annual financial filings with Companies House do not provide a geographic breakdown of where bet365 derives its revenue.

In January, bet365’s financial statement for the 53 weeks to 31 March 2024 showed revenue climbed 9% to £3.7bn, while profit soared to almost £400m.

However, the report stated: “A geographical analysis of turnover has not been given as in the opinion of the directors such a disclosure would be severely prejudicial to the interests of the group.”

Bet365 says it is live in more than 150 countries and available in 22 languages.

In an analysis note reacting to the China departure, boutique research firm Regulus Partners, which described the country as “the last material dark grey market”, estimated it represents less than 5% of bet365’s annual revenue.

To put it into context, that’s under £185m, based on the latest set of accounts, coming from gamblers’ losses in China.

Regulus Partners suggested that back in 2014 China was worth 20% of revenue, making it the second most important market for bet365, behind only the UK.

However, the note said China has been “waning in importance for over a decade” due to a combination of “deliberate declining operational focus on China, increasingly effective state disruption, and growth elsewhere”.

On the ramifications of the exit, Regulus Partners wrote: “We believe that bet365’s exit from China and ‘similar markets’ is important to the wider gambling sector because it further widens the gap between domestically regulated and ‘easily justifiable light grey’ on one side, and ‘dark grey, possibly anthracite’ on the other, with specific operations management decisions tipping enforcement risk, especially payments.

“Some operators and suppliers continue to try to straddle the full spectrum before explicitly black, but we believe this policy of operational flexibility is becoming increasingly unsustainable in a world where governments and regulators are becoming more digitally savvy, while mass market customers need more localised focus.”

The research firm estimates bet365’s domestically regulated mix stands at 90% now that Brazil has switched from grey to white.

China’s betting market – excluding horseracing and football betting offered by the Hong Kong Jockey Club – is worth an estimated $20bn in net revenue a year, Regulus Partners added.

In other bet365 news, the operator’s latest development in the US has seen it partner with Missouri-based Major League Baseball (MLB) outfit the St. Louis Cardinals.

The company has entered into a multi-year agreement with the sports team that will in turn grant bet365 the ability to operate mobile sports betting in the state. Under a new Missouri state law, every licensed sportsbook can establish sports betting operations via a partnership with a local sports team.

As per the terms of the deal, bet365 can now advertise on Cardinals radio broadcasts, the Cardinals Insider TV show, cardinals.com and feature on in-stadium promotions that will be visible on television.