500.com revenues surge despite online lottery sales ban

500.com revenues surge despite online lottery sales ban

Chinese online sports lottery service provider 500.com has announced a 1,500% year-on-year increase in revenue in 2Q17, despite an ongoing suspension on accepting online purchase orders for its lottery products.

The company attributed its revenue gain to the launch of its sports information and mobile gaming businesses as well as the acquisition of approximately 40.65% of the issued share capital of MelcoLot Limited in June 2017. 500.com also acquired 93.0% equity interest of The Multi Group Ltd in July 2017.

Net revenues were RMB19.3 million (US$2.8 million) for the three months to 30 June, compared with RMB18.4 million in Q1 and RMB1.2 million for the second quarter of 2016.

Operating loss was RMB69.5 million (US$10.3 million), compared with operating loss of RMB63.9 million for the first quarter of 2017 and operating loss of RMB89.4 million for the second quarter of 2016.

“As part of our effort to expand our business scope and create additional revenue sources, we have commenced our sports information and mobile gaming businesses since the fourth quarter of 2016 and have witnessed steady revenue growth from them,” said CEO Mr Zhengming Pan

“We believe that these businesses and strategic acquisitions will create strong synergies with our existing operation platform.”

However, he added that the company’s progress continued to be held back by the voluntary suspension of online lottery sales, which was in response to the official notice relating to Self-Inspection and Self-Remedy of Unauthorized Online Lottery Sales which was jointly promulgated by the Ministry of Finance, the Ministry of Civil Affairs and the General Administration of Sports of the People’s Republic of China on 15 January 2015.

“We want to restate that the Company was one of the two entities approved by the Ministry of Finance in 2012 to provide online lottery sales services on behalf of the China Sports Lottery Administration Center,” he said.

“In particular, such approval mandated that the China Sports Lottery Administration Center use its best effort to develop an online lottery sales management system as part of a pilot program for online lottery sales in China, and once such a management system is finished, the China Sports Lottery Administration Center should apply again for approval from the Ministry of Finance for official commencement of online lottery sales in China.

“The company notes that it has been working and will continue to work with the China Sports Lottery Administration Center to develop the management system. To the best of the company’s knowledge, the approval by the Ministry of Finance for the Company to provide online lottery sales services on behalf of the China Sports Lottery Administration Center is valid and has not been revoked or amended as of the date of this earnings release.”

Source: 500.com revenues surge despite online lottery sales ban