After Mao Zedong led the Communists to victory in 1949, China's new rulers suppressed gambling as a social evil on a par with prostitution and opium.

But, as with so many other topics, Mao's heirs to power in Beijing are much more equivocal about gambling today.

Last month, officials from the Ministry of Finance joined an unprecedented international conference in the capital to discuss legalizing it.

This month, the Ministry of Public Security launched a nationwide crackdown against it. Gambling, said agency chief Zhou Yongkang, has ``seriously undermined socio-economic development and [the] fundamental interests of the people.''

Since then, Chinese state media have tallied more than 15,000 arrests as police fan out across the country in taskforces with foreign affairs, tourism, education, customs, telecommunications and finance officials to round up gambling Web site operators and users, Mark Six ticket vendors, underground bookies and gaming parlor barons, wayward wagering cadres and border casino bosses.

The dragnet may be broad but it is not as tight as it seems.

Following Zhou's initial announcement, his subordinates gave assurances in subsequent state media interviews that ``entertainment'' activities such as small-stakes mahjong and poker played among family and friends at Lunar New Year will not be harassed. Police will distinguish between entertainment and gambling - in part by whether the motive of players and organizers is profit or fun, one official added.

There are other get-out clauses too. Government-operated lotteries and Macau's casinos and horse and dog races have escaped any official mention.

So much for Red China's black and white stance. Today's leaders are quietly going gray and appear to be embracing an approach to gambling based on that of Hong Kong.

The SAR licenses mahjong parlors and does not restrict private games. The nonprofit Hong Kong Jockey Club is empowered to sell lottery tickets and take bets on its own horse races and on European soccer matches as long as it pays taxes on those bets, dedicates another big chunk of revenue to community causes, and supports programs to help problem gamblers.

With prodding from the club, the government has banned all other betting, restricted advertising of other forms of gambling and forbidden credit card issuers from processing payments to other bet takers. The police vigorously pursue illegal bookmakers and cricket-fighting rings.

Kim Mak, the Jockey Club's executive director corporate development, took part in last month's meeting in Beijing. He says attending officials showed considerable interest in the club as a model.

Other attendees point to the conference's title, ``The Gaming Industry and Public Welfare,'' to underscore official interest in harnessing a cultural passion for gambling to public funding needs.

Chinese academics at the conference decried the flow of funds to overseas casinos, lottery scandals and problems in the development of horse racing, but not gambling itself.

Estimating that mainlanders spend more than 600 billion yuan (HK$565.68 billion) a year at casinos and racetracks in the two SARs and foreign countries, Wang Zengxian of the China Center for Lottery Studies called for an enlightened government monopoly that will gradually develop horse and casino betting to support economic development.

Constricted gambling options have benefited criminal gangs by giving them a lock on casino gaming and sophisticated soccer betting. Manila-based gaming consultant Kelvin Tan estimates that gambling rings, many with links to Taiwan, collect more than US$1 billion (HK$7.8 billion) in bets on individual international soccer matches. Market research firm Access Asia estimated in 2002 that as many as 50 major underground casinos were operating within the mainland, taking in more revenue than the public casinos of Malaysia or the Philippines.

As in other countries, criminal involvement in gambling is also associated with prostitution and extortion.

Many presentations at the conference focused on the prevention and handling of gambling addiction. Moves to regulate gambling rather than ban it will allow authorities to acknowledge the problem and set up programs to deal with it.

After the conference, China Center for Lottery Studies executive director Wang Xuehong said her organization won official approval to set up a toll-free nationwide hotline for problem gamblers in reaction to a string of press stories and letters about gambling-related divorces, suicides and homelessness.

Implied continuing support for public lotteries shows Beijing's appreciation of the valuable funding they provide the welfare and sports departments that operate them.

Similarly, the unspoken reaffirmation of legalized gambling in Macau underscores Beijing's approval of the economic prosperity brought to the SAR by the opening up of the gambling industry and the loosening of restrictions on travel from the mainland. These developments were toasted just last month by President Hu Jintao during a visit to commemorate the fifth anniversary of Macau's return to Chinese rule.

However, an article in the International Herald Leader magazine, published by Xinhua, suggested that Beijing did not intend mainlanders to become the main customer base for Macau's new casinos. Rather, it hoped liberalization would help make Macau more of an international destination, attracting visitors from Japan, Europe and other distant places.

It follows that private-sector gambling on the mainland is a main target of the current crackdown. In the months before it started, police in coastal provinces broke up card games and soccer and cricket betting rings and forced the Beijing Jockey Club to suspend racing.

Last month, the discovery that Cai Haowen, a transport official from the northeastern border town of Yanbian, apparently took 3.5 million yuan in public funds to wager at Albert Yeung's Emperor Hotel and Casino, just over the North Korean frontier, pushed the presence of some 200 border casinos on to the national agenda.

These casinos long enjoyed tacit tolerance. Most opened in poor neighboring countries heavily dependent on Chinese support. In some cases, Chinese authorities provided utility connections. Provincial governments allowed the border casinos to recruit staff using government job listings and promoted casino tours on official travel Web sites. Liberal issuance of border-crossing permits and lax enforcement of currency controls provided a crucial boost.

The blind eye Beijing turned to the border casinos led to a crescendo of projects that became impossible to ignore.

A stream of foreign companies formed joint ventures with Vietnamese government agencies to build casino resorts of ever-increasing scale, capped by a proposal for a US$1 billion waterfront project named Vina Las Vegas that was reported to be backed by investment bank Lehman Brothers. (Spokeswoman Mia Trinephi says Lehman is ``currently not involved.'')

Xu Rongmao, one of China's richest private entrepreneurs, announced last autumn that his Shimao Group would develop a 10 billion yuan logistics and entertainment complex that would sprawl over the Russian border and include a casino. Then early this month, with reports of Cai's alleged misdeeds still fresh, a top executive of Albert Yeung-controlled Emperor (China Concept) Investments said the company was looking at investing in casino-hotel projects in Russia too.

Beijing launched its national crackdown a week later. State media accounts initially focused on the border casinos. They quoted officials saying that a preliminary campaign in December in Yunnan province had forced the closure of between 68 and 84 establishments in Burma, Laos and Vietnam. Chinese gaming managers were detained, utility connections cut, customer reception centres shuttered and border controls tightened. Subsequent accounts added a few Russian casinos to the tally and heralded the closure of the Emperor Casino in North Korea.

A similar cycle may be under way with gambling Web sites. Though Beijing has used technological tools to block mainlanders from accessing many international news and porn sites for years, Beijing hasn't acted against offshore gambling sites and has ignored their advertising in state media, perhaps counting on operators' difficulties in collecting payment from Chinese customers as a natural barrier to growth.

Last autumn, however, Citic Pacific, a Hong Kong-listed arm of state-owned China International Trust and Investment, set up a Web site in Macau directed at Chinese-speaking sports bettors in a joint venture with an Irish betting exchange. Companies around the world have set up hundreds of Chinese-language gambling sites, but this venture's high-profile backing undoubtedly caught Beijing's's attention.

The initial focus of state media reports of the crackdown on border casinos has been followed by a spotlight on Web gambling, especially a case involving the detention of almost 600 customers and agents of a Taiwanese gambling site operator. Other international operators are waiting to see if their sites will come under scrutiny. ``Touch wood,'' says a Citic Pacific executive.

But despite official talk of a ``relentless fight'' against gambling, it's not clear how far Beijing will take the campaign. Public Security Vice-Minister Bai Jingfu forbade banks to offer ATMs or other banking services along the borders and instructed them to block transfers or credit card payments to gambling Web sites. A Macau-based Web site called 1-Pay.com that is linked to several gambling Web sites and which allows mainlanders to play using their yuan debit cards, has stopped opening new customer accounts. An executive of British-based betting exchange site Betfair linked the halt to the crackdown, but a 1-Pay.com employee says the site is simply being upgraded.

Moreover, despite concerns about offshore casinos sucking cash out of the mainland and tightened checks on traveler's cash, Beijing continues to loosen restrictions on its citizens' overseas spending. A day before the crackdown was unveiled, Beijing announced its citizens could use their debit cards in South Korea, a country whose casinos have been strongly pursuing Chinese custom.

Top public security officials have vowed to eliminate foreign casinos' agents and offices on the mainland that put together trips for Chinese high rollers. ``The campaign will try to block the channels through which many Chinese go abroad for gambling,'' Minister Zhou said.

Yet a spokesman for three of Las Vegas' biggest casino operators, Harrah's Entertainment, MGM Mirage and Caesars Entertainment, says none of their agents in China have reported new restrictions. ``[We] have heard nothing about a crackdown on gambling,'' says Gary Thompson of Harrah's.

Similarly, Tom Liu, the general manager of the Tinian Dynasty Hotel and Casino, which underwrites charter flights from Guangzhou to its South Pacific island gambling palace, says bookings have not been affected. The resort expects a full house during Chinese New Year.

Zheng Gu, a tourism professor at the University of Nevada-Las Vegas, says overseas casino resorts may escape the dragnet by arguing they offer many activities besides gambling. Liu, for instance, says Tinian Dynasty is ``promoted as a tropical island destination for guests to enjoy sun and beach.''

Gu believes border casinos won't escape so easily. On the day before the Emperor Casino closed, city officials in Yanbian told travel agencies and tour guides there to halt gambling tours or face the loss of their licenses. Yet spokeswoman Christina Ng of the Emperor Group says that although the casino has been closed indefinitely, the doors were shut to allow renovations to be carried out.

The border casinos that have closed may just lack sufficiently influential patrons. Casinos linked to Macau magnate Stanley Ho and other foreign investors continue to operate in Vietnam. ``This is a sensitive business,'' says a marketing executive at a Malaysian-owned casino in the border town of Lao Cai, declining to discuss the impact of the crackdown. ``We are a legal casino.''

Despite Emperor's seeming setback in North Korea, the group says it is still considering investing in Russia. Shimao's Web site also still promotes its Russian project.

Thai Prime Minister Thaksin Shinawatra's government has spoken out as vehemently as Beijing about border casinos that target his constituents. But beyond a few short periods of restricted crossings, the casinos in Cambodia, Laos and Burma have stayed busy, says Bangkok-based casino consultant Ted Loh.

International Internet gambling executives believe China may restrict the crackdown to sites that are not licensed by any country. Hong Kong is one of the few governments to have made it a crime for foreign sites to accept bets from its citizens, although there have been no charges laid against either bettors or foreign sites since the law was enacted in 2002, according to Hong Kong police. Thailand has taken the alternative path of telling Internet service providers to block specified gambling Web sites but Loh says many have not complied.

Another potential target seemingly untouched by the crackdown is cruise ships that sail into international waters from Chinese ports to offer gambling. A travel agent in the port of Haikou says she is still taking bookings for sailings on the Ming Fai Princess, owned by Hong Kong-listed China Golden Development. Her Web site, however, says cruises will be halted after February 15 as the ship goes in for repairs.

The ship's casino generated a healthy profit of HK$46.7 million on HK$128.5 million in revenue during the first 11 months of 2004, according to a filing this week by China Golden, which is moving forward with a plan to buy a 20 percent share in casino profits in exchange for HK$40 million.

At any rate, Beijing says the crackdown will run for only five months. Loh believes it's a good bet that it will be business as usual after that as has often been the case with campaigns against other disfavored activities. If Beijing is really serious about quashing gambling, Loh says, it will hike the penalties for gambling offenses.

In Brunei, a court recently sentenced four Thai workers to a month's imprisonment or a B$600 (HK$121) fine after investigators found them playing gin rummy with B$3 on the table.

That's relentless.