BUSINESS

Asia lotteries: Thailand moves ‘online’, Taiwan sports woes, China mobile distrust

TAGs: China, china lottery industry salon, GTech, gtech loxley, Lottery, taiwan, Taiwan Sports Lottery, thailand

taiwan-china-thailand-lotteriesThailand’s long quest to introduce online lottery services moved a little closer to the finish line on Tuesday after the Thai cabinet approved the regulations guideline put forward by the National Anti-Corruption Commission (NACC). The Bangkok Post quoted a government spokesman as saying the plan is to have the system up and running by the end of the year. To clarify, the National Lottery Office’s definition of ‘online’ refers only to the ability of punters to access lottery terminals in designated shops that allow them to select their own lucky numbers, rather than having to buy a pre-printed ticket. The terminals will be operated by Loxley Gtech Technology – the joint venture involving lottery tech specialists GTECH and Loxley Public Company Ltd. The latter is controlled by Thailand’s prominent Lamsam and Chatikavanij families.

The push to modernize Thailand’s lottery system dates back to 1996, when restrictions on the number of lottery tickets issued created a supply v. demand conundrum in which retailers were able to charge more than the official price and illegal lotteries sprung up like Ron Jeremy’s dick in a convent. Lottery terminals were proposed as a solution, but a change in government meant the idea was dropped until 2005, when a new government took the reins and hired Loxley Gtech to install 12,000 terminals. By 2008, Loxley Gtech had installed around half that total when the government was overthrown by a coup, leading to confusion as to where the plan stood.

In 2010, the new administration announced it was having second thoughts on the morality of expanding lottery services and would seek to cancel Loxley Gtech’s contract. The firm promptly filed a lawsuit against the government, seeking millions of dollars in compensation for the general clusterfuckery. But a Loxley Gtech exec told the Bangkok Post he expected the suit to be dropped now that the present administration has set the wheels back in motion.

TAIWAN SPORTS LOTTERY TENDER
In Taiwan, companies interested in taking over the country’s troubled Sports Lottery have until Oct. 26 to submit their applications. The current licensee, Hong Kong-listed Fubon Bank and its Taiwan Sports Lottery Corp. subsidiary, has announced it will not be throwing its hat into the ring after struggling to make a go of the lottery in its four years of existence. Sales were so sluggish that Fubon was unable to meet its contracted remittance to the government. The challenges stem from the mandated 78% customer payout and the requirement to place 10-bet parlays, restrictions that have sent punters fleeing into the welcoming arms of non-governmental alternatives. About the only thing working in the Sports Lottery’s favor is its status as the sole form of gambling the government permits to take place over the phone and the internet.

The new licensee must be a majority Taiwanese-owned outfit, so any foreign outfits will have to partner with a local. Several western firms are believed to be considering submitting a bid, if only to gain a toehold in the Asian market. The license would be valid for a 10-year term and the licensee would be responsible for hitting annual revenue targets of NT13b (US $445m) – triple the existing commitment – so whoever gets the nod will have their work cut out for them. The winning applicant will be named by Dec. 21. On Oct. 31, Taiwan is scheduled to announce which firm has won the 10-year license to operate the country’s infinitely more successful Welfare Lottery.

CHINESE LOTTERY PLAYERS GOOD AT MATH, BAD AT LOGIC
China has an estimated 200m residents who regularly play the lottery. Together, they’ve purchased RMB 169b (US $27b) worth of tickets through the first eight months of 2012, according to the country’s Ministry of Finance. Welfare Lottery sales were up 22.7% to RMB 99.24b, while Sports Lottery sales rose 21.9% to RMB 69.73b. In a bid to shine more light on this burgeoning industry, China Lottery Industry Salon recently released its 2012 China Lottery Internet Survey Report, which queried nearly 25k total respondents over two separate periods – May to July 2011 and February to April 2012.

The survey revealed that over 94% of lottery players were male and over half were under 30 years old. Almost 60% held a college degree. Lottery participation was higher in more economically developed areas, with 73.4% of respondents residing in major cities and just 10% living in rural areas. Bizarrely, while over 60% of players understood that their odds of winning a big prize were infinitesimally small, nearly two-thirds of respondents expressed confidence that they’d eventually hit a jackpot so long as they continued to play.

Assuming they had access to an internet connection in their home, three-quarters of respondents said they felt comfortable buying lottery tickets via their computer. Meanwhile, only 43.9% said they used their mobile to purchase tickets, but that number is expected to grow as consumers grow more confident with smartphone technology. China Daily reported that online ticket sales hit RMB 15b in 2011, 30x the figure spent in 2007.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com