BUSINESS

Sports lottery operator 500.com reports third straight quarter of nil revenue

TAGs: 500.com, China, china vanguard group, sports lottery

500-com-revenue-cupboard-bareOnline sports lottery operator 500.com turned in its third consecutive quarter of nonexistent revenue following China’s industry-wide suspension of online lottery sales.

On Wednesday, the Shenzhen-based 500.com reported net revenue of RMB 700k ($100k) in Q4 2015, down from RMB 146m in the same quarter the previous year. The company reported a net loss of RMB 109.7m (US $16.9m) for the quarter, compared to a net profit of RMB 14.5m in Q4 2014.

For the year as a whole, 500.com’s revenue was down nearly 84% to RMB 99.6m, while the company recorded a net loss of RMB 324m compared to a RMB 157m profit in 2014.

This marks three straight quarters that 500.com has reported nil revenue, a downturn brought about by the “temporary” suspension of online lottery sales imposed by Beijing authorities last March. The authorities were prompted to act after an audit uncovered widespread fraud among unauthorized online lottery agents.

500.com CEO Zhengming Pan noted that his company was one of only two operators authorized to offer online lottery sales as part of a pilot program and the company has received no official notice that this program won’t continue when Beijing finally takes its foot off the brake. But until then, 500.com won’t be issuing any future earnings guidance.

What little revenue 500.com generated in Q4 came courtesy of its new payment processing unit Sunpay.cn, which 500.com acquired in December in a bid to diversify its business until online lottery sales resume. Meanwhile, 500.com’s cash reserves continue to shrink, falling to RMB 400m by the end of Q4, down from RMB 652m at the end of Q3.

In more positive Chinese lottery news, China Vanguard Group has inked a deal to provide in-store marketing technology solutions for the Shenzhen Sports Lottery Administration Center. The deal covers installation of LED panels in lottery offices to provide advertising and information services as well as the Le Yao electronic coupon distribution and physical lottery ticket subscription service.

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