Online sports lottery re-opening in China

China suspended online lottery sales last year, prompted by the discovery of widespread corruption at provincial lottery administration centers. Many Chinese companies were forced to halt their online lottery business. Alibaba, which reportedly accounted for 11% of all online lottery sales in China, was not an exception.

Fortunately several companies, including Baidu’s lottery website Lecai, have been allowed to resume their online lottery activities recently, as reported by several sources. This is good news for participants in the Chinese sports market, since 2016 is a year of major events like the UEFA Euro 2016, the Copa América and the Rio Olympics, all of which would boost the growth of the Chinese online lottery market.

It seems that Chinese sports moguls have foreseen the market trend, and have begun to launch their lottery businesses. On February 25th, Le Sports, the sports arm of China’s leading internet company LeEco, announced the investment of US$10 million in 8win, a Chinese online sports lottery company which has just completed Round B fundraising.

“The two sides will develop a soccer lottery around (our) exclusive Chinese Super League (CSL) resource, enabling CSL fans worldwide to experience the complete joy and passion that soccer matches bring to them, just like Premier League fans.” said Le Sports CEO Lei Zhenjian.

Soon after that, China online retailer Alibaba, the parent company of Ali Sports, invested HK$2.39 billion ($308 million) to gain about 59% control of AGTech Holdings Ltd. in a return to the lottery market after exiting due to government restrictions earlier.

AGTech is principally engaged in gaming technologies, online and mobile lotteries, and lottery management. Upon the completion of this deal, AGTech will become the exclusive lottery platform of Alibaba.

Analysts believe that if the online lottery recovers during the 2016 CSL season, the sales volume will reach RMB 200 bn to 300 bn. Notably, Le Sports launched a CSL betting game on its platform when the CSL kicked off on March 4th, which covered the 16.6 million viewers who watched the first-round game. If this model can be introduced into Le Sports’ online lottery business, millions of CSL fans will become their potential customers.

Proofread by John Devlin.