April 27, 2018 / 5:45 AM / 7 months ago

Shares of China internet poker game firms drop on reports of ban

HONG KONG (Reuters) - Shares in Chinese companies offering online and mobile poker games have shed up to a fifth of their value over the past week, following reports in local media that the government would ban all poker-related applications from June 1.

FILE PHOTO - A man looks at the screen of his mobile phone at Pudong financial district in Shanghai July 8, 2013. REUTERS/Carlos Barria

Companies like Boyaa Interactive and Our Game have seen their stocks slide up to 18 percent since the informal directive from the country’s ministry of culture was reported in local media on April 19.

There has been no official statement so far and the ministry did not respond to a request from Reuters for comment on Friday.

A copy of the directive - circulated in local media and seen by Reuters - asks gaming platforms to stop operating Texas Hold’em games, a variation of poker, forbid services that transfer or trade virtual currency and stop the publication of anything poker or gambling-related on Weibo and WeChat.

Boyaa, Our Game and Chinese internet giant Tencent, which last year signed a multi-year agreement with the World Series of Poker brand, have responded by pulling poker-related games ahead of the deadline, local media said.

Boyaa did not respond to requests for comment.

The company provides web and mobile games including Texas Hold’em and Big Two Poker, and gets over 70 percent of its revenue from online poker games. Our Game said in a statement dated April 19 that it had pulled some of its content.

“In order to actively respond to the call of the country and purify the network environment ... some Texas Hold’em products will be tidied and reorganized to maintain a healthy gaming environment,” said Our Game, which has over 500 million users.

Tencent did not respond to requests for comment but local media reported the company had shut its World Series of Poker app and started prohibiting access to poker-themed chat rooms.

Gambling is illegal in China, with the exception of a local lottery market and the booming casino hub Macau, but the Chinese are still among the world’s most prolific gamblers.

Industry executives say companies have been offering poker as part of their entertainment platforms but some apps are used by individuals or groups to run illegal gambling operations.

Poker has risen in popularity with many deeming it a skilled game like bridge. The proliferation of online poker apps has spawned a black market for buying and selling game coins.

“This is another concept of gambling. Now the amount and scale concerning Texas Hold’em is relatively large so it needs to be regulated,” said Su Guojing, a special adviser of China Center for Lottery studies.

($1 = 7.8480 Hong Kong dollars)

Reporting by Farah Master; additional reporting by Alexis Tan; Editing by Himani Sarkar

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