Nasdaq-listed online sports lottery operator 500.com lost $11.3m in Q3 thanks to China’s ongoing suspension of online lottery sales.
On Thursday, 500.com reported nil sports lottery revenue, the sixth straight quarter that the company has failed to earn a thin dime from its main reason for being. The net result was a net loss of RMB 75.3m ($11.3m), nearly three times the sum the company lost in Q2.
500.com has been in the dumps since March 2015, when China ordered a temporary suspension of online lottery sales after uncovering rampant corruption at provincial lottery administration centers. Rumors circulated earlier this year that Beijing was preparing to resume online sales but so far no concrete action has been taken.
As of September 30, 500.com had cash and equivalents on hand totaling $67.4m, about one-third less than it had at the end of Q2. 500.com CEO Zhengming Pan reiterated his belief that his company will be allowed to resume online lottery sales once China’s Ministry of Finance gives the okay, but he offered no guidance on when this might occur.
After losing more than one-quarter of their value on Monday, 500.com’s shares are currently up around 4.5% on Friday. Because apparently nothing spurs investor confidence more than torching $11.2m while bracing for another double-digit-millions arson party in a couple months’ time.
AGTECH SAYS LOSSES ARE NO CAUSE FOR CONCERN
Things were slightly rosier over at land-based lottery technology provider AGTech, where Q3 revenue fell 5% to HKD 73.1m ($9.4m) while net losses improved by more than half to HKD 20.1m thanks to decreases in share-based payments.
The year-to-date numbers were worse, with revenue down 15.7% on reduced lottery hardware sales. The company claims this is only short-term volatility and these things tend to balance out over the long run. AGTech, which was acquired by Chinese internet giant Alibaba earlier this year, primarily makes its bones by selling lottery games and systems, hardware, and distribution and ancillary services.
AGTech also has a virtual games joint venture with UK bookmakers Ladbrokes that has produced two products, the Formula 1-themed Lucky Racing and the football-themed e-Ball Lottery. These products have been successfully launched in Hunan and Jiangsu provinces but the company has been waiting three years for permission to expand outside these regions. AGTech also hopes to offer these products online whenever Beijing lifts its online suspension.