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39 year old CEO opens a casino! Chengdu police report arrest of Douyu Chen Shaojie: suspected of opening a casino

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One day after the arrest of CEO Chen Shaojie in Douyu Announcement, Chengdu police released details.
On November 22, according to the "Police Bulletin" of Dujiangyan Irrigation Project Public Security Bureau, Chen Moujie (male, 39 years old) was found to be suspected of opening a casino after investigation. At present, Chen Moujie has been arrested in accordance with the law. The case is under further investigation.
On November 21st, Douyu (Nasdaq: DOYU) announced that its CEO, Chen Shaojie, was arrested by Chengdu police around November 16th. Douyu stated that the company has not received any formal notice regarding the investigation into Mr. Chen or the apparent reasons for his arrest. The company is unable to comment on the nature or expected timeline of potential future legal proceedings (if any). Mr. Chen's continued detention and any subsequent legal proceedings and enforcement actions against relevant parties may have a significant adverse impact on the company's reputation, business, and operating performance.
Previously, multiple sources confirmed to Pengpai News that Chen Shaojie had lost contact in October.
On November 21st, sources told Pengpai News that Chen Shaojie was arrested by the police or suspected of gambling. The source revealed that Chen Shaojie's gambling experience can be traced back more than a decade ago and is related to the former head of Renren Network, Xu Chaojun. From January 2010 to January 2011, Chen Shaojie was a direct subordinate of Xu Chaojun and participated in gambling with him throughout the year.
According to public sources, Xu Chaojun was admitted to Tsinghua University at the age of 16, participated in founding Chinaren, served as the technical director of Sohu, and was the head of Renren. At the age of 30, he became the Chief Operating Officer and President of Shanda Online.
In 2017, Xu Chaojun was reported to have gathered for gambling. According to public reports, the gambling tables set up by Xu Chaojun far exceeded the amount suspected of gambling. According to the Criminal Law, gathering three or more people and involving a cumulative gambling capital of over 50000 yuan constitutes a gambling crime. Within half a month, the gambling organized by Xu Chaojun involved a total amount of over 3 million yuan. On July 29, 2017, according to Beijing TV, Xu Chaojun was arrested with the approval of the procuratorate on suspicion of gambling.
Previously, it was learned from insiders of Pengpai News that Chen Shaojie's loss of contact may be related to gambling involving the "nine outdoor" and "Changsha rural death squads" in the Douyu live broadcast room. "The Douyu gambling case seems to be the behavior of the anchor, but in reality, the boss is operating behind the scenes," the industry insider said.
According to public media reports, the Douyu live broadcast room "Sending Nine Outdoors" (also known as "339 Outdoors" or "339 Outdoors") was previously suspected of gambling by tens of thousands of people, with a total annual revenue of nearly 120 million yuan.
"Send Nine Outdoors" is composed of fighting anchor Fu Hailong, Pan Bin, JT, the Great Demon of Haoke and other members. On December 23, 2022, according to the trial of Dujiangyan Irrigation Project City Court, Sichuan Province, the behavior of the three people constitutes the crime of opening a casino. According to the law, the anchor was sentenced to pay a fixed term imprisonment of six years to XX and XX, and Pan was sentenced to probation according to the law for the subsequent Qin and Zhou, and a fine of 1.65 million yuan was imposed on the three people.
In addition, the "Changsha Rural Death Squad" has been broadcasting suspected gambling activities using various lottery rules for Douyu. Users can participate in a virtual currency lottery worth 1000 to tens of thousands of yuan by purchasing designated items within a certain period of time. The "Changsha Rural Expendables" then purchased virtual currency in equal amount through third-party channels such as Alipay or "backpackers" to cash in their bonuses.
The live broadcast room often starts gambling and lottery at 10 pm, and the "Changsha Rural Expendable Team" also refers to gambling as the "10 pm Economic Class", with the "start class at 10 pm" as the public secret code. Many teenagers are addicted to it, suffering heavy losses and unable to extricate themselves. Some users made crazy bets of over 300000 yuan in the live streaming room within half an hour.
On October 13th, the "Social Products Legal Compliance Department" of the official account announced that the head of a large live streaming platform was recently arrested by authorities in a certain area of Sichuan on suspicion of opening a casino, and there is widespread speculation that it is related to Chen Shaojie's loss of contact. However, on November 6, a reporter called the person in charge of the official account and the team of Kenting Law Firm. The other party said that the push article was not directly related to Chen Shaojie's loss of connection, and the article has been deleted.
Douyu, headquartered in Wuhan, is a gaming centric streaming live streaming platform. Users can enjoy interactive games and entertainment real-time streaming through platforms on PCs and mobile applications.
Chen Shaojie's last public appearance was in a conference call after Douyu's second quarter financial report on August 14th. At that time, he stated that he would continue to build a healthy and sustainable gaming community ecosystem for Douyu, attach importance to the operation of core users, implement the development strategy of "a diversified content ecosystem platform centered on games", and be committed to the production of high-quality content and innovation of product models.
According to the financial report, Douyu's net profit for the second quarter was 61.4 million yuan, a year-on-year increase of 161%. However, its total revenue was 1.392 billion yuan, a year-on-year decrease of 24.1%, and it has been on a downward trajectory for three consecutive years.
As of the close on November 21st, Douyu closed at $0.9, down 5.93%.
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