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The first part of this series addressed standard compliance rules and the essential features of live-stream trading card unboxing. Given that such streams merge retail sales with chance-driven mechanics and real-time interactivity, the legal considerations reach further than conventional live-stream retail, engaging issues of minor protection, oversight of probability-based marketing, and prevention of criminal liability.

This article proceeds to analyse the key legal risks and offers practical compliance guidance.

The legal risks

Live-stream trading card unboxing presents legal risks on three fronts: regulatory compliance; protection of minors; and criminal liability.

Regulatory compliance. The foremost concern is disclosure risk. Blind box products are characterised by uncertainty regarding the card type and scarcity at the point of purchase by consumers.

Merchants should therefore provide full pre-sale disclosure of the product name, origin, distribution and draw probabilities, alongside robust record keeping for both sales and draws.

Under the Guidelines on Regulating Blind Box Business Practices (Trial), merchants selling blind boxes, whether physically or on the internet, must preserve complete records of probability configurations and sales results, enabling traceability in the event disputes arise.

In the case of custom blind boxes, failure to adequately disclose card provenance and draw probabilities may readily invite allegations of false advertising and lack of transparency.

Minor protection. Live-stream trading card unboxing holds strong entertainment appeal that leaves minors susceptible to impulsive purchases.

Article 74 of the Minors Protection Law bars online providers of either products or services from inducing unreasonable minor spending through live-streams. Under article 12 of the Measures for the Administration of Online Live-stream Marketing (Trial), platforms must establish minor protection mechanisms and deploy technical barriers against high-risk consumption by minors.

Article 23 of the Guidelines on Regulating Blind Box Business Practices (Trial) additionally forbid blind box sales to minors under eight years old, and require guardian consent for minors aged eight and above.

Criminal liability. In extreme instances, live-stream trading card unboxing may cross the line from ordinary commercial transactions into criminal conduct ¨C most notably gambling offences and fraud.

(1) Gambling. The Criminal Law defines a gambling establishment or gambling offence as a profit-driven activity that organises multiple participants to stake money or property on a chance-determined outcome. Sports trading card unboxing may constitute gambling where randomness is over-emphasised and the payout structure incentivises ¡°small stakes for large gains¡±.

Relevant judicial precedents have confirmed that such conduct constitutes a gambling offence.

In a case commencing October 2024, the defendant, Jiang, conducted live-stream sports trading card unboxing on Douyin and other platforms, featuring chance-based paid mechanisms including unboxing and code-guessing games.

Participants paid to receive high-value cards or vouchers based on random results. The court found Jiang had organised multiple participants, determined outcomes by chance, and amassed total receipts exceeding RMB1.3 million (USD190,680), with illegal profits of about RMB100,000.

Jiang was convicted of operating a gambling establishment and sentenced to two years¡¯ imprisonment, suspended for two years, with a fine of RMB50,000.

(2) Fraud. Fraud allegations involving sports trading card unboxing live-streams have reached the courts. From September 2023, a Hunan-based criminal gang sold blind boxes of sports trading cards via live-stream and online platforms using false marketing and behind-the-scenes manipulation to cheat consumers.

They sourced cheap or fake cards, boxed them themselves and flashed high-value cards on camera to drive sales. During unboxing, they used blind spots to swap out or hide premium cards, leaving buyers with low-value cards, or empty-handed.

The operation raked in about RMB2.9 million. Police arrested 31 individuals and seized equipment and cards. The case confirms that deceptive claims, covert manipulation and opaque unboxing practices can establish fraud under criminal law.

Compliance recommendations

To lower legal risk and protect consumers, live-stream trading card unboxing must observe proper disclosure.

Merchants should clarify upfront that the card type and rarity are chance-based and specific cards are not guaranteed.

Rules, winning conditions and odds should be published in advance where lucky draws, code-guessing or similar mechanics feature to prevent disputes over hidden information.

Transparency must be maintained throughout the live-stream. Trading card unboxing should take place wholly within view of the camera, free from blind spots or misleading cues, with the card distribution and unboxing results displayed truthfully.

To curb impulsive spending, merchants should establish spending caps, cooling-off intervals and deter-rent measures for scenarios involving repeat purchases, high-value orders or underage participants.

Merchants should also implement comprehensive record keeping for sales and draws, preserving particulars of purchaser data, draw results and reward issuance to enable traceability should disputes or regulatory scrutiny arise.

Provided the format remains free of gambling mechanics and is properly managed, these steps allow live-stream trading card unboxing to operate lawfully while substantially reducing exposure to gambling and fraud risks.

Jiang Shen is a partner and Song Xueting is an associate at Jingtian & Gongcheng

Read more about live-stream trading card unboxing

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