Mystery box gambling scheme uncovered

Police have recently warned the public about the dangers of buying mystery boxes online through so-called "prize-guessing contests", which may constitute the crime of gambling.

A nationwide crackdown initiated by the Ministry of Public Security has led to the seizure of over 1 million mystery boxes since late April, with confirmed funds totaling 210 million yuan ($29 million), and the operation is ongoing.

In March, police from Lanzhou, Gansu province, discovered a local vendor selling mystery boxes in sets during a livestream on an online shopping platform through prize-guessing contests, with prices of the boxes exceeding 10 times the market value, ranging from 200 to over 400 yuan for each. The price discrepancy caught the attention of police and led them to investigate.

In the contests, the items contained in the boxes were not important. Rather, the "buyers" were concerned with a particular group of "lucky numbers" written on the boxes. To "buy" the boxes, they clicked on links posted in the live-streams, entered the numbers they were predicting and placed their bets.

Once customers finished betting on the boxes, each of which had one number written on it, the host revealed the "lucky numbers". He then opened the numbered boxes and arranged them in ascending order, similar to a lottery ticket.

Those who correctly guessed the lucky numbers were then directed to join a WeChat group to "redeem points".

Police found that each winning number had a "point" value. Customers who had selected all or some of the winning numbers would receive cash in exchange for "redeeming the points". Any remaining funds were retained as profit for the vendors.

Their investigations found that a significant number of sold and opened boxes were never delivered to buyers, proving the theory that the items were not what the bettors were after.

The investigations also revealed that the livestreams tended to attract the same participants each time, some of whom had been arrested for gambling in the past. Over a five-month period, the online platform generated over 10 million yuan in revenue.

Police soon uncovered 13 other online platform merchants selling mystery boxes to buyers in Lanzhou in a similar manner.

They also noted that the suspects used coded language in online broadcasts and WeChat groups to evade oversight by public security authorities and livestreaming platforms, making it difficult for law enforcement departments to identify and address the crimes.

The police collaborated with the court, the procuratorate and legal experts to study the issue. Ultimately, they concluded that the sale of mystery boxes disguised as prize-guessing contests constituted a form of gambling, which is a crime on the Chinese mainland.

Zhang Yong, an officer from the Lanzhou Municipal Public Security Bureau, said that casting bets by clicking links in livestreaming rooms to place bets was akin to using chips in a traditional casino.

"The merchants are suspected of operating gambling venues, while the gamblers, who are these betting players, are suspected of engaging in illegal gambling activities," he said.

Zhang urged mystery box enthusiasts and players to be cautious about engaging in such activities. He noted that it is essential to ensure transparency in the marketing of mystery boxes.