China online lottery clampdown to cause short-term pain for longer-term gain

China’s clampdown on online lottery sales is likely to have a significant impact on the country’s booming lottery market in the short term, but shouldn’t be read as a signal that Beijing is seeking to permanently shut down remote lottery distribution, experts say. E-commerce giant Alibaba on Tuesday said it was suspending sales of online lottery tickets in China, following in the footsteps of New York Stock Exchange-listed online lottery company 500.com, Tencent and others. Although estimates vary on how much of the RMB 382.4 billion ($61 billion) in 2014 sales were actually generated online, the amount is thought to have been “substantial.” However, industry insiders say the existing system was badly flawed and the suspension may pave the way for a much needed overhaul. Both legal lotteries in China, the Welfare Lottery and the Sports Lottery have a national brand and national regulation, but the day-to-day operations are organized at the...

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