BUSINESS

China lottery slump continues as online suspension bites Rexlot profits

TAGs: China, rexlot holdings, sports lottery, World Lottery Association

rexlot-holdings-china-lottery-suspensionChina’s lottery sales fell nearly 11% in August as the sector continues to wait out the government’s ‘temporary’ suspension of online sales.

China’s Ministry of Finance reported that lottery sales fell 10.9% to RMB 28.1b (US $4.41b) in August. Welfare lottery sales fell 11.8% to RMB 15b while sports lottery sales dipped 9.9% to RMB 13.1b.

For the first eight months of 2015, overall sales are off 1.8% to RMB 242.8b, with the welfare lottery down 0.4% to RMB 133.4b and sports sales off 4.2% to RMB 109.4b.

The temporary suspension of online lottery sales that began in March has been credited with helping to depress the H1 figures of lottery operator Rexlot Holdings, which formerly sold tickets through its Okooo.com site. Rexlot said its lottery turnover was down 7% to HKD 848.8m ($109.5m) in the first six months of 2015. Profit took a harder hit, falling 23% to HKD 342.2m.

Rexlot said the online suspension took a particularly hard toll on its single match games (SMG) business, for which the internet was a key distribution channel. Rexlot’s welfare lottery Computer Ticket Games (CTG) business was also negatively affected. Putting on a brave face, Rexlot said the online moratorium would be good in the long run as it will bring necessary regulation to the sector.

China’s online lottery suspension was credited with slowing the growth of the lottery market across the whole Asia-Pacific region in the first half of 2015. According to figures released by the World Lottery Association (WLA), the Asia-Pacific lottery market posted annual growth of 14.3% in Q1, but this slowed to 4.6% in H1. At least some of this slowdown can be attributed to Q2 2014 having enjoyed the first half of the FIFA World Cup, which pushed China’s sports lottery sales to unseen heights.

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