Reports have emerged that the Chinese government is planning to relaunch online lottery operations after those were suspended in March 2015 after evidence of fraud by officials from lottery administration centers across a number of provinces.
According to an unnamed industry insider, a new regime for conducting online lottery options is likely to be introduced but only after all the necessary regulations are prepared. However, it is still unclear how much exactly it would take for the said regulations to be crafted.
As mentioned above, online lottery sales were suspended in March 2015 after audits showed suspicious activity in provincial lottery offices. The suspension contributed to the overall lottery sales dropping 3.8% year-on-year in 2015 to the amount of RMB367.9 billion. The decline was also attributed to the slowdown in the Chinese economy.
Chinese officials had approved two companies – Sporterry.cn and 500.com – to take part in a pilot online lottery program. Aside from that, no lottery operator had been officially authorized to sell lottery tickets on the Internet. Due to the absence of such authorization, a number of other Internet companies engaged in offering online lottery services.
Following what was said to be a temporary suspension of online lottery sales, all those businesses suffered certain declines in their key metrics. However, 500.com was the provider to be hit the hardest as it reported no revenue at all from sports lottery sales in the following three quarters after online lottery operations were suspended. To illustate this with figures, it generated the amount of RMB99.6 million in net revenue for the year ended December 31, 2015, down almost 90% from the RMB579.7 million in 2014.
In March, AGTech Holdings, known to be a Hong Kong-listed provider of technology for the lottery industry, issued its annual financial report, with CEO Sun Ho saying in it that the Chinese government is expected to approve new channels for lottery sales, referring to online and mobile ones. What is more, last October, lottery operator DJI Holdings revealed that officials had approved a field trial of a mobile app for sports lottery sales in the Shandong province.
Government representatives have not commented on the reports about the potential relaunch of online lottery sales and it is still unknown when and whether those will indeed be relaunched.
