Chinese Streaming Platform DouYu’s CEO Arrested for Illegal Gambling and Pornographic Content

Published: November 7, 2023, 06:49h. 

Last updated: November 7, 2023, 06:49h.

According to investment research firm Grizzly Reports, DouYu, a popular Chinese live streaming platform, has been involved in supporting illegal gambling activities by its streamers. The platform’s founder and CEO, Chen Shaojie, was reportedly arrested in October for allegedly allowing gambling and pornography on the platform.

A sign for Chinese streaming platform DouYu installed in a stadium
A sign for Chinese streaming platform DouYu installed in a stadium. The company’s founder and CEO, Chen Shaojie, was arrested for gambling and other illegal content on the platform. (Image: Imaginechina)

Cover News, a state-owned media outlet in China, reported on the arrest but did not explicitly mention Chen’s arrest. Instead, it stated that he was “taken away” and has not been seen or heard from since then.

This is not the first instance of a high-profile entrepreneur disappearing in China. Jack Ma, the CEO of Alibaba, and Bao Fan, the founder and CEO of China Renaissance, also faced a similar fate. Ma has since maintained a low public profile, while Bao has not been seen since February.

Chen’s Rise to Prominence

Chen founded DouYu in 2014 and successfully built it into one of the leading brands in China, specializing in live video game content and eSports.

DouYu has amassed a following of approximately 50 million users and has expanded into legitimate areas such as live cooking and home repair. However, it has also allegedly ventured into prohibited activities in China.

In the past, Grizzly Reports accused DouYu of encouraging streamers to create online lotteries and engage in other forms of gambling, viewing it as a lucrative source of revenue. The company, which is backed by Tencent, underwent an on-site inspection by the Cyberspace Administration of China in May following orders from Chinese authorities for “rectification.”

Chen’s fate may mirror that of another streaming entrepreneur, Wang Xin, who faced legal consequences for facilitating the exposure to pornography and gambling through his platform. Wang was sentenced to three and a half years in prison and fined CNY1 million (US$137,300). He was released after serving two years of his sentence.

DouYu’s NASDAQ Listing Under Threat

The negative attention surrounding Chen and DouYu in recent years has had a significant impact on the company’s standing. In 2019, the company received substantial support from investors during its initial public offering, raising $775 million and reaching a valuation of nearly $4 billion.

However, since then, the company’s market value has plummeted to below $300 million, and Chen’s disappearance will only worsen the situation.

On February 12, 2021, DouYu’s stock was trading at its all-time high of $18.72 on NASDAQ, but it quickly declined afterwards. By November, it had dropped to $3.96, and as of Monday afternoon, it was priced at $0.84.

Consequently, NASDAQ has notified DouYu that the company is at risk of being delisted. DouYu stated in an October statement that it must regain a stock price above $1 for consecutive 10 days by April 22 to maintain its position on the exchange.


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