China will encourage the organization of horse races and the development of sports lotteries on the tropical island of Hainan, a step towards a potential liberalization of gambling, almost prohibited in the country.

The island province of Hainan is located in the very south of China, about 240 km east of the coast of Vietnam. Beijing wants to make this lagging economic island an international tourist destination.

China will support the development of horse racing, sports lotteries or seaside and nautical activities, according to a government reform plan, announced Saturday by the agency Chine nouvelle.

Gambling, like casinos, is strictly prohibited in mainland China same as in Japan where you can only play casino online. And the government has stepped up its crackdown in recent years, amid anti-corruption campaigns.

The country does however have non-profit public lotteries which aim to develop sport, or improve the living conditions of the disabled, the elderly and orphans.

The potential development of a gaming industry in Hainan could make it a rival for Macao, the Chinese territory where gambling is allowed. Former Portuguese colony returned to China in 1999 but endowed with a large autonomy, Macao has established itself as the world capital of casinos, far ahead of Las Vegas in terms of turnover.

The project announced on Saturday also provides for greater openness of Hainan to foreign investments in certain sectors: health, education, sport, internet, culture or finance.

All of these flexibilities are part of a plan to attract more visitors to the island. Because despite its sandy beaches, coconut trees and tourist infrastructure, Hainan attracted only one million foreign visitors in 2016. This is seven times less than the Thai island of Phuket, according to the Bloomberg agency.

New China also announced last week that Beijing plans to open a free trade zone in Hainan, as there have already been around ten in China since 2013. In theory, such an area allows for import, processing and export of goods without the imposition of customs duties.