500.com Q3 loss widens, revenue edges higher on Europe sales

500.com, a Chinese online sports lottery provider, said its Q3 loss widened, though revenue edged higher on online sales in Europe following the acquisition of Malta-based The Multi Group (TMG) in July 2017.

Net revenues were RMB30.1 million ($4.4 million), up 3.8 percent from the prior year. TMG, which provides online betting and online casinos in Europe, accounted for 78.1 percent of total revenue.

The net loss attributable to 500.com was RMB101.6 million, compared with a net loss attributable of RMB72.2 million for the third quarter of 2017, due mainly to increased share-based compensation expenses of RMB29.3 million.

The non-GAAP net loss, which excludes these expenses, was RMB58.8 million.

500.com’s business model was hit hard by China’s ban on online lottery sales in April 2015. The U.S.-listed company said it won’t provide financial forecasts until it has clear indications as to when China’s Ministry of Finance may allow such sales to resume.

“Since we voluntarily suspended our online lottery sales operations in April 2015, we have continued to engage in new and promising initiatives to increase our revenue base,” said CEO Zhengming Pan.

As well as the TMG acquisition, the company entered into a framework accord in March this year with the China Sports Lottery Administration Center to cooperate to develop physical channels to sell sports lottery tickets. It has so far reached agreements with Tianjin, Hunan and several other provinces and cities in China.