500.com reports widened loss in 16Q1

China lottery provider 500.com reported a net loss of RMB90.9 million (US$14.1 million), down from RMB52.0 million for the first quarter of 2015.

The lottery provider in a recent filing said the continued online lottery suspension, which began in March 2015 meant the company did not generate any revenue from sports lottery sales since.

Net revenue was reported at RMB2.2 billion, “primarily generated from the rendering of technical and data maintenance services by Sumpay.cn.”

On March 31, 2016, the company announced it has disposed its 63 percent equity interested in Sumpay.cn for a total consideration of RMB359.1 million. According to the purchase agreement, 20 percent of the total consideration, or RMB71.8 million, will be transferred immediately to the company by the acquirer, and the remaining 80 percent, or RMB287.3 million, will be settled within 10 days after Sumpay.cn successfully renews its online payment license in 2016.

In a note from 500.com’s CEO, Zhengming Pan, the lottery executive stressed that the company was one of the two entities approved by the Ministry of Finance in 2012 to provide online lottery sales services, which has not changed. “To the best of the Company’s knowledge, the approval by the Ministry of Finance… is valid and has not been revoked or amended as of the date of this earnings release.”

For the full year 2015, the company reported a 82.8 percent decrease in net revenue at RMB 99.6 million.

Operating loss was RMB301.4 million, representing a 301.6 percent decrease from operating profit in 2014, which was at RMB149.5 million. Net loss attributable to 500.com was RMB323.9 million.