Top Chinese Sports Lottery Operator Plans Expansion of Its Social Networking And Mobile Features

Leading Chinese sports lottery 500.com is performing spectacular on the New York Stock Exchange and is planning to improve its social networking features prior the beginning of the FIFA World Cup tournament.

500 lottery network is one of the first online lottery ticket sellers, which was established in the beginning of the 2000s. At the end of last year it went public on the New York Stock Exchange and its share price was more than double, just three months after its introduction, when it hit US$51.37/share in January.

This amazing performance indicates the investors’ confidence in the company and the great potential of China’s online lottery sector in general.

Two types of lotteries are the only form of gambling that is allowed on the Chinese mainland, according to the Chinese gambling laws. One of them is the Welfare lottery and the other one is the discussed Sports lottery.

Great prospects

Lottery grew more popular in the last 10 years, therefore the lottery sales have grown more than 10%, exceeding $48.19 billion in 2013, which was 18.3% more in comparison to the year before, according to Ministry of Finance’s public statistics.

500.com is performing spectacular on the NY Stock Exchange and is planning further improvements
 
• 500.com is the only Chinese online lottery provider, which has gone public

• The company’s share price more than doubled for the first three months after its debut

• The sales of 500.com were around 29% of the total online sports lottery sales in China for the first half of 2013

The ministry did not announce the share of lottery tickets, which were sold online. However, iResearch, a consultancy firm, estimated that the sales of 500.com were around 29% of the total online sports lottery sales in China during the first half of 2013.

The company itself reported in its 2013 financial statement that mobile users were around 67% of all active users in the fourth quarter of 2013. Thus, the money they spent were around 18% of the total lottery sales on the 500 lottery network.

Potential problem

The Chinese government introduced ban on online lottery sales in March 2012, which was trying to hit the illegal online casinos in China, as well as the scams. In its 2013 financial report, 500.com said that it has voluntarily terminated the online lottery ticket sales, when the ban was announced.

The online sports lottery ticket sales were resumed in November 2012, when the Ministry of Finance allowed the company to proceed with this aspect of its business. This approval calmed down the investors who were concerned that the enterprise won’t be able to achieve the same results.

In the beginning of 2013 new change was introduced to the regulation on lottery tickets, which approved an inclusive legal status to online lottery ticket sales, which was solid prove for the investors that the sector is secure and will be growing in the future.

Future improvements

Currently 500.com is the only Chinese online lottery provider, which has gone public and Vincent Law, the chairperson of the company, commented that the brave move has had “a positive effect on the entire industry.”

He added: “Little is known about the online lottery industry. If there is any information, it’s mostly negative. A public listing subjects the company to scrutiny from investors and regulators and offers greater transparency.”

Law explained for the media that the company is planning to expand its social networking features towards its lottery sales platform before the start of the World Cup in the summer and that the provider is also expecting more sales coming from mobile device users.

He added that the company hasn’t set any concrete sales goals related to the football tournament: “Soccer fans might not use our site to buy lottery tickets, but they can use our platform to network with other fans, and discuss matches or a particular player.”

Mobile interest

500.com managed to sell more than $488 million worth of sports lottery tickets to more than 20 million registered users in 2013, therefore its attempt to enter the mobile internet market is not a surprise.

The enterprise signed a deal in January this year with China Mobile E-commerce, which is the third-party payment subsidiary of China Mobile, the country’s biggest mobile operator, when it comes to subscribers.

The deal consists of a new payment opportunity for 500.com, which could possibly increase the sport lottery sales made on mobile devices. The payment service has around 31 million active users per month and its annual transactions in 2013 were $20.88 billion.

Before signing this contract, the company also allowed payments through Alipay, which is the third-party payment service of the Chinese e-commerce giant Alibaba.

500.com also has Apple and Android apps and has been trying to incorporate its lottery ticket sales service on other famous apps with a large number of users like Alipay.