BUSINESS

China sports lottery sales spike; online lottery freeze boosts DJI Holdings’ losses

TAGs: China, dji holdings, sports lottery

dji-holdings-china-lotteryChina’s lottery numbers rose again in May, spurred by double-digit growth in sports lottery sales.

According to figures released on Friday by the Ministry of Finance, overall lottery sales came to RMB 34.6b (US $5.4b) in the month of May, up 7.8% from the same month last year. For the year to date, sales are up 0.5% to RMB 160.3b.

In keeping with recent trends, sports lottery sales growth dramatically outpaced welfare lottery numbers. Welfare lottery sales were up 1.8% to RMB 18.4b while sports lottery sales were up 15.6% to RMB 16.2b. The sports lottery numbers will undoubtedly get a further boost in the next monthly report thanks to the Euro 2016 football tournament.

UK-licensed lottery and payment processing firm DJI Holdings, which focuses on the Chinese market, announced this week that its annual after-tax loss had widened to £11.4m in 2015 from £3.6m in 2014. The company blamed Beijing’s March 2015 decision to ‘temporarily’ suspend online lottery sales, a suspension that continues to this day.

DJI’s 2015 revenue tumbled from £47.5m in 2014 to just £5.5m last year, while gross profit fell from £5.6m to £1.2m. Meanwhile, the company’s stash of cash and equivalents fell from £10.8m to just £4m.

DJI CEO Darren Mercer called 2015 a “year of transition” for his company, while highlighting DJI’s ongoing efforts to diversify its revenue streams. Since the end of last year, DJI has struck a deal with Xinhuatong to facilitate payments via the Xinhua News Mobile App and the Xinhuatong partnership has already signed deals with nine of China’s 10 largest provinces.

China has recently been making noises about restarting its online lottery market but DJI is prudently taking steps to shore up its balance sheet. On Friday, the company announced a conditional placing of some 30.5m new shares. The £29m raised via this placing will enable DJI to “progress a number of major strategic opportunities under discussion, with the potential to develop significant new revenues.”

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