Chinese police have arrested the founder of Tencent-backed game-streaming site DouYu on suspicion of operating a casino, in a rare case of holding a tech entrepreneur criminally responsible for activity on their company’s media platform.
Police in the small southwestern city of Dujiangyan on Wednesday confirmed they had arrested a 39-year-old man with the surname Chen, a day after DouYu said its chief executive and chair Chen Shaojie had been arrested by police on November 16.
Authorities in October as police probed pornography and gambling on DouYu’s platform. Gambling is illegal on the Chinese mainland. Since founding DouYu in 2014, Chen has built the company into one of China’s leading game-streaming and esports brands.
He has faced challenges more recently, including a failed plan by main backer Tencent to merge the group with rival Huya, and a tough crackdown by Beijing on livestreaming sites. Chen’s troubles increased after China’s powerful internet watchdog in May dispatched a team of officials to the company’s offices for a month of “intensive rectification and supervision” of “porn and vulgar content” discovered on the platform.
The arrest of another well-known Chinese executive is a setback to the ruling Communist party’s attempts to reassure entrepreneurs and reinvigorate the private sector. Chen’s weeks-long disappearance has already put many in the tech and entertainment industries on edge.
His arrest in Dujiangyan comes after authorities in the city last year arrested and then convicted a livestreaming group called Shanshanjiu Outdoor for running a gambling ring on DouYu’s platform.
According to the Dujiangyan court, users participated in Shanshanjiu’s lotteries by paying for virtual gifts, with lotto winners receiving cash prizes. The court said the group roped in more than 4mn participants who put up Rmb120mn ($17mn) over the course of 4,267 lottery draws.
In 2020, Chinese state media reported on another group called Changsha Countryside Death Squadron, which took in Rmb177mn from running gambling operations on DouYu.
