As far as I know China not allow online gambling although I don't have source news. Since bitcoin isn't traceable if don't know who own the address perhaps China people's would use VPN. And I believe most of legit crypto-currency gambling doesn't ask for KYC. So China player can get benefits of it.
Many people are of point of view that it does not matter if a country government allow or disallow gambling but they maybe wrong.
If the gambling is not allowed in china or any country, people may still play online gambling using proxies and vpn but they will not be able to run a gambling site or business.