AGTech Holdings inks new Chinese sports lottery terminal deal

agtech-sports-lottery-chinaHong Kong-listed Asian sports lottery tech provider AGTech Holdings Ltd. turned in its interim results for the first six months of 2013, during which gross profits rose to HKD 50.9m (US $6.5m) from HKD 47.6m in H1 2012. AGTech pulled off this feat despite group revenue falling to HKD 97.2m from HKD 99.3m a year earlier. The group recorded a net profit from business operations of HKD 1.4m compared to a HKD 2.6m loss last year, but a one-off share option payment in May of HKD 38.6m to investor Cheung Lup Kwan resulted in a loss attributable to AGTech owners of HKD 52.7m. Absent this payment, AGTech’s owners would have faced a loss of HKD 14.1m, better than the HKD 27.2m loss a year ago.

AGTech also announced that its Beijing AGTech GOT Technology subsidiary won a competitive tender to supply C8 Sports Lottery Terminals to the Guizhou Sports Lottery Administration Centre (SLAC). Guizhou SLAC has farmed out its business to multiple suppliers, but GOT will provide around three-quarters of the total allotment. In May, GOT won a similar tender with the SLAC in the eastern Anhui province. There are around 130k authorized sports lottery terminals in China, and GOT supplies over half of them.

Looking ahead, AGTech is hoping to build on its recent delivery of lottery terminals to South African horseracing operator Gold Circle Ltd. AGTech CEO John Sun said the company was in “active discussions” with other international customers and distributors over possible deals. AGTech is still waiting on the Chinese government to approve the national rollout of its Lucky Racing virtual sports betting game, a joint venture with UK bookies Ladbrokes currently available only in Hunan province, where it has captured 30% of the total sports lottery market.

Hopefully those Chinese authorities mulling Lucky Racing’s fate won’t be swayed by a truly bizarre story of a ‘lottery addict’ in Shanghai. A 46-year-old man identified only as Xiao told the Shanghai Evening Post that he’d spent RMB 6m ($980k) on lottery tickets in the past three years, and that his obsession with hitting a jackpot had cost him his family and all his worldly possessions. The once thriving businessman spent up to RMB 20k in a single day in pursuit of a big payday that never came.

Xiao eventually sold four apartments, four cars and watches to feed his habit, which ultimately cost him his business and his family, as his wife finally had enough and divorced him last year. A lottery retailer vividly depicted Xiao’s downward spiral thusly: “At first, he drove a car, then he rode a moped, and finally, a bicycle.” Frankly, he’d have been far better off riding a ferry to Macau, where at least he’d have had some input into the outcome of his wagers.