AGS | Legalising online lottery in China would bring considerable profits to its gov't, no threat to Macau - AGTech CEO
With the illegal lottery market in China value estimated at RMB2 trillion, the CEO of the official technology supplier in the country told MNA that he believed that if the Chinese government allowed and regulated online services for its two-state run lotteries it could see revenues collected go up by 100 per cent, with RMB245.2 billion having been collected in the first half of this year just from offline authorised lotteries
Taipei (MNA) – The CEO of AGTech Holdings, a lottery technology and services company partnered with Alibaba, told Macau News Agency (MNA) that if the Chinese government regulated online lottery services it could pull resources from an illegal market with a value estimated at RMB2 trillion (US$288.9 billion)
“For this year the current official market is around RMB400 billion with near to 30 per cent yearly growth thanks to the 2018 World Cup. But the data itself is not as important as the message, that there is so much potential market for growth, with the government able to get more taxation by regulating the market,” Mr. Sun said.
Currently Chinese authorities two types of lotteries under the Ministry of Finance, the China Sports Lottery and the Welfare Lottery – AGTech being an official service provider for the Chinese government – with just legal lottery having generated some RMB245.2 billion in the first half of this year, a 20 per cent yearly rise from the year prior.
Mr. Sun made the comments on the sidelines of the Asia Gaming Summit being held in Taipei, Taiwan between November 6 and 8.
John Sun (Middle)
Sports lottery went up 6.1 per cent to RMB134.6 billion, while welfare lottery jumped 4.2 per cent to RMB110.6 billion in the first six months of the year.
However since 2015 Chinese authorities have suspended online lottery sales in the country for this two official state lotteries with no indications yet the ban could be lifted.
“As a government you can’t just let illegal operators to come in to China to offer services with the government getting nothing. There’s also no responsible gaming or lottery activities. If authorities regulate it, it is a win-win […] It could go to social services, sport installations, etc,” he added.
According to Mr. Sun AGTech has been in discussions with the government on how to better monitor and regulate the market and counterpoint illegal operations and demonstrate the untapped potential of the Chinese market.
“Penetration rate in China is still below 10 per cent while in the US is above 60 per cent and 80 per cent in Thailand. The market potential is huge. We hope the Chinese government can improve the channels quality and content,, the current betting shops are not up to international standards,” he stated.
With lottery betting also mainly involving lower income gamblers, Mr. Sun also predicted that allowing online operations and improving betting channels would attract a larger percentage of middle-income players, estimating legal lottery revenues could go up 100 per cent or more.
The data collected through online gambling would also allow authorities to have a better understanding of problem gambling int he country and how to reduce it.
Nevertheless, the AGTech CEO did not believe the legalisation of online lottery operations would have a negative impact towards Macau gaming revenues due to the scope of gambling offerings already in offer in the city.
“It’s a different story, they are different product, with the lottery itself being aimed at raising charity funds for the government. Pay rate for casino products can be as high as 92 per cent. Lottery is a different case,” Mr. Sun added.
Macao SLOT Co. Ltd., has the exclusive betting concession in the city for instant lottery, football and basketball having generated about MOP706 million in revenues in the first nine months of 2018, while Sociedade de Lotarias Wing Hing Limitada – which has the concession for Chinese lottery – generated only some MOP10 million in the same period.
*Reporting from Taiwan
