BUSINESS

China’s Communist Party suffers revenue hit after online lottery suspension

TAGs: China, sports lottery, thailand

china-government-revenue-lottery-suspensionThailand police have arrested 17 Chinese nationals for operating an illegal online lottery targeting punters back home.

On Tuesday, police raided a house in Thailand’s Chiang Mai province, arresting 14 men and 3 women, each of whom was caught using a notebook computer to facilitate wagering with customers in China. All 17 of those arrested had arrived in Thailand on a tourist visa.

The group’s ringleader told police he’d rented the house on Aug. 5 and used it as a branch of a company operating in China. Like many of the South Korean nationals busted for online gambling in Thailand, the Chinese group reportedly chose to set up shop in the country due to its comparatively lenient punishments for gambling offenses.

China suspended all online lottery sales at the end of February after determining that unscrupulous provincial lottery administrators weren’t reporting all online sales while pocketing the difference. The ‘temporary’ suspension, which has yet to be lifted, has had a significant effect on a number of companies, from dedicated lottery operators like 500.com to online retail giant Alibaba.

The suspension has also hit the online platform of People’s Daily, the official newspaper of China’s Communist Party. People.cn Co Ltd reported its H1 revenue growth fell 33% from the same period last year, while profits fell 39.4%. The shortfall was blamed on the suspension of the online lottery business of Okooo.com, which saw revenue fell 48.6%.

Financial services platform consultant Li Zichuan told China Daily that the online suspension had forced many online companies to remodel their businesses. Li said the suspension was an attempt by the government to exert more control over the online lottery sector rather than a bid to stop the industry altogether, and suggested the government could issue formal online licenses before 2015 is done.

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