Govt cleans up gambling in mobile apps

China is expected to see a more family-friendly mobile app market after the top cultural authority's recent crackdown on gambling-related content.

As many as 27 mobile game publishing platforms and app-store operators, including Baidu App and Android Market, were told late last year by the Ministry of Culture to rectify games that contain information advocating gambling or that allow lottery-style in-app purchases. Their deadline was the end of 2013.

Lottery-style in-app purchases within a game increase a player's chances of winning or receiving a reward. This type of purchase originated in Japan and is known as "Kompu Gacha". Due to the random nature of lotteries and the uncertainty of rewards, the feature can be seen as promoting gambling.

Twenty companies have thus far submitted reports to the ministry about corrections they have made in their apps or games, deleted sensitive information that pertains to gambling and canceled lottery-style in-app purchasing.

The seven other companies failed to make corrections by the year-end deadline and have received administrative penalties.

Two of the delinquent companies, based in Shanghai, were held responsible for irregularities, such as having lottery-style in-app purchases in mobile games Against War and Fantasy Monster, and were fined 60,000 yuan ($9,755) and 130,000 yuan.

Yu Yi, a game analyst formerly with Analysys International, said online games, including mobile games, need correction.

"Right now, with the rapid growth of the market, there is a need to combat the growth of gambling in mobile games and related products," said Yu. "While game publishers and app-store operators can be subject to the ministry's supervision, the core problem lies with video game developers."

Yu said the government's policy is to remove and regulate games that have obvious gambling elements. He added that regulations won't have a major effect on the overall market, but its impact on lottery-style in-app purchasing will be significant.

Zhang Liang, a managing director at Beijing-based mobile solutions company PapayaMobile, said China's mobile game operators often imitate their Japanese counterparts, specifically in adding gambling-related content into games. But with the ban in place, he said, some in the industry are already making adjustments. He added that all mobile game operators will soon follow suit.

"But gambling-related content is important to how mobile games profit," Zhang said. "So while the industry is removing the more obvious elements of gambling, the nature of the games will remain unchanged."

According to the ministry, the market for mobile games reached 13.8 billion yuan in revenue last year, a year-on-year increase of 112.6 percent. The country now has 170 million users of offline mobile games and 120 million of online games.

Li Gang, an official with the ministry, said the scale of the market is making it increasingly hard for the ministry to supervise it.

Li said challenges largely result from the short life cycle of products, intertwining responsibilities between developers, operators and publishing platforms, and complications in obtaining evidence about illegal lottery-style in-app purchases.

Despite the obstacles, the ministry is ready to take further actions to help regulate the market, which will include releasing a manual detailing irregularities in in-app purchases and updating its blacklist of companies found advocating gambling and vulgar content, he said.