Lottery supplier AGTech Holdings Ltd said it believes the Chinese government will start to regulate the development of the online and mobile lottery systems and distribution market, allowing the industry to grow at a faster pace.
The Hong Kong-listed firm, a supplier to mainland China’s regulated lottery market, reported revenue of HKD53.1 million (US$6.8 million) for the three months ended September 30, up 137.1 percent from a year earlier. Cost of sales however jumped 186 percent year-on-year to HKD34.6 million, the firm said in a filing on Wednesday.
Third quarter losses attributable to owners of the company widened to HKD49 million, up from 21.5 million a year earlier.
AGTech said it continues to shift its core operation “from legacy, lower-growth businesses to fully integrated services involving its advanced, high-growth gaming technology business”.
Total lottery sales in mainland China reached RMB279.41 billion (US$45.6 billion) during the first nine months of the year, according to official data.
The company said its lottery business now covers over 80 percent of the provinces and municipalities in China.
“Overall, the underlying trend of lottery sales growth of recent quarters has been somewhat below historical levels (ignoring the once-every-four-years effect of the FIFA World Cup),” AGTech said.
“This trend is likely to lead to an increased pace of regulatory progress in the lottery market [in mainland China] in terms of the approval and roll-out of new products as well as the development of new, remote distribution channels,” it said, adding that it is well prepared to react quickly to changes in government policy.
The firm said it would continue to explore new business opportunities in mainland China, but also in Macau.
“The group is currently assessing a potentially exciting acquisition opportunity in China,” AGTech said in Wednesday’s filing.
It added: “Through its relationship with its strategic shareholder in Macau, the group will continue to explore business development opportunities in Macau.”
On November 4 it was announced that Tencent Holdings Ltd, a firm that controls some of the most popular online social media platforms in mainland China, has completed a subscription – via a wholly held unit – to 594,034,513 shares of lottery technology firm China LotSynergy Holdings Ltd.
(Updated at 12.00pm)
