GGRAsia – Lottery operator awaits better regulated market in China

Lottery operator awaits better regulated market in China

Mar 29, 2016 Newsdesk Industry Talk, Latest News, Rest of Asia

London-listed DJI Holdings Plc, a supplier of services to mainland China’s lottery market, says the industry expects the Chinese government to lift the suspension of online sales of lottery products once new regulations for the sector are published.

The suspension of sales of online lottery products in China was confirmed in April last year and described at the time as “temporary”.

In a press release on Thursday, DJI said the recent investment in lottery operations by major Chinese corporations “indicates the confidence of sector operators in the opportunity for growth in the lottery market in China”.

Alibaba Group Holding Ltd, China’s largest e-commerce operator, earlier this month took a majority stake for around US$300 million in AGTech Holdings Ltd, a Hong Kong-listed supplier of equipment, software and services to mainland China’s lottery market.

DJI said in its statement it “remains hopeful but patient” as it awaits the “return of a better regulated lottery landscape” in China.

“DJI is in discussions with a number of significant partners and [lottery authorities in] provinces in China and the company looks forward to announcing these in the near future,” said the firm.

On Thursday, the lottery provider also announced that it would be expanding an existing partnership in Shandong province with the launch of sales via mobile phones of sports lottery products across the province.

Sales will be done by Qingdao Baifa Network Science Technology Service Co Ltd, in which DJI holds a 50-percent stake. The joint venture firm began trial sales in October in Qingdao city, in Shandong province.

Shandong province ranked second in total sales of sports lottery tickets in 2015, with aggregate sales above RMB15 billion (US$2.3 billion) last year.

The expansion of mobile sales in Shandong province “marks a major development and revenue opportunity for DJI while online sales of lottery products remain suspended in China,” the firm said.

The company said the mobile phone application is “the first Ministry of Finance approved mobile lottery sales app” in Shandong. DJI will be responsible for developing and executing the marketing strategy, it added.

Commenting on the development, DJI’s chief executive, Darren Mercer, said: “The opportunity to launch the only officially approved mobile lottery app in China’s second largest provincial lottery market is expected to make a substantially material impact on group revenues in the current financial year.”