China’s central authorities issued an order at the end of February demanding all provincial and municipal governments report the status of their online lottery sales ahead of March 1st. The new regulation has thus lead to the suspension of lottery sales on nearly 40 websites across China, including major ones like Alibaba’s Taobao, Tencent, NetEase, and Sina’s Aicai,.
500.com, one of the only two entities Beijing has officially authorized to participate in an online sports lottery pilot program, also halted online lottery sales services. The share price of 500.com plunged after the company announced this.
Buying lottery tickets online has become increasingly popular in China. The country’s lottery sales surged to a record-high of RMB382.3 billion (US$61 billion) in 2014, up 23.6% year-on-year, according to China Sports Lottery Administration Center. Research institute Analysys predicted that the total online lottery market is expected to reach RMB88.5 billion in 2014, accounting for 22% of total lottery sales in China.
Despite its widespread popularity, China’s online lottery industry faces numerous problems which have raised the concerns of the regulators. In the eight years since 2007, China’s online lottery service has been suspended four times for rectification.
Sports Lottery Administration Center, the country’s official regulator of sports lottery market, sent out audit teams to review the practice of provincial sports lottery authorities from last November. Unlike the previous four suspensions, the audit covers both lottery companies and websites, said Li Jian, founder of lottery consulting agency Caitong Consulting, in an interview with China Business News. He added the whole industry will experience a more extensive overhaul this time.
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Editing by Mike Cormack (@bucketoftongues)