21 November, 2007
Major Domestic Online Sports Gambling Operation Taken Down
Officers from the Criminal Investigation Bureau (“CIB”) took down a major domestic online sports gambling operation last month in Taichung that had established a fake law firm to serve as the front for its operations. Authorities arrested eighteen suspects and seized computers and records from the operation. The Taichung-based operation offered an ideal target for the CIB as it appears to have based its infrastructure solely within Taiwan.
The hosting of gambling in Taiwan contravenes the Criminal Code. Criminal liability arises under Article 268 when an individual or entity, for the purposes of gain, furnishes a location for gambling or assembles persons to gamble. While online gambling operates in a virtual world, the Taichung-based operation located its servers in Taiwan and handled payments and collections through the dummy law firm - the operation reportedly averaged US$3 million a month in wagers. The locating of the servers in Taiwan and the handling of the cash transactions locally in this case would, however, be enough for authorities to have jurisdiction as well as to satisfy the elements of Article 268.
In determining Taiwan's jurisdiction over internet crimes, the Courts take all relevant factors into consideration including the location of the website and e-mail servers, the location of data processing servers, and the location of actual acts. In a situation where the website servers, e-mail servers, and data processing servers are located outside of Taiwan, the Courts will likely not take jurisdiction. It should be noted, however, even hosting outside of Taiwan and targeting the local market may still trigger a criminal investigation locally though and it is also an offense to market or advertise online gambling locally. The CIB’s focus, however, appears to be on domestic online operations. The difficulty faced by local authorities, is that Taiwan has only entered into a limited number of Agreements on Mutual Legal Assistance in Criminal Matters with other countries and that the gambling is often not a criminal offense in the country hosting the infrastructure.
Legal, local online gambling appears a long way off in Taiwan. The government has, however, recognized the increased popularity of sports gambling by the public and the lucrative nature of gambling tourism in recent years. The Act Regulating Special Sports Lotteries came into effect on 25 October 2006 and local pundits should be able to legally wager on sports through a licensed sports lottery come April 2008 albeit not online. The Council for Economic Planning and Development (“CEPD”) also plans to submit the draft Act Governing Casino Concessions in International Tourism Resort Areas to the Legislative Yuan though not until after the presidential election scheduled for March 2008. The CEPD intends to grant three casino concessions as part of resort developments. There are, however, no foreseeable plans to legalize online gambling in Taiwan.
For more information on Taiwanese jurisdiction on cross-border crimes, please contact Marcus Clinch at +886-2-2311-2345 ext. 511
