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CHINA
Sales boom raises regulatory concern China’s lottery sector continues to boom, but uncertainty over how Beijing may react to the rapid growth continues to linger, with big questions over the future direction of online sales and sports betting.
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n recently announced figures, China’s Ministry of Finance said total lottery sales in 2018 enjoyed a 19.9 percent year-on-year increase to CNY 511.47 billion ($75.85 billion). The growth was powered by the China Sports Lottery, which during a World Cup year saw sales grow 36.8 percent to CNY 286.9 billion ($42.55 billion). For the first time, Sports Lottery sales outstripped those of the China Welfare Lottery, which saw a modest 3.5 percent year-on-year increase to CNY 224.56 billion ($33.3 billion). “Generally speaking, the administrations of the [Sports and Welfare Lotteries] are happy to see the rapid increase of lottery revenues, which means funding for good causes increases accordingly,” Dr. Haiping Chen, a researcher at the Lottery Research Centre of China at Beijing Normal University told AGB. “However, some officials at the Ministry of Finance, which serves as the monitoring organization, are concerned about whether the growth is a good thing. Based on the past few years of data, the amount spent in some
Asia Gaming Briefings | March 2019
western provinces on the lottery is a little bit too high versus the per capita disposable income of urban residents,” Chen added. Indeed, while Guangdong remains China’s largest single province for lottery sales, the western province of Guizhou was one of two provinces in the country – alongside Jiangxi – to report a yearly increase in sales of more than 30 percent. Still, lottery’s strong performance is very much a national phenomenon; of the 31 provinces and cities licensed to sell lottery products, all but Tibet recorded revenue increases in 2018. The Sports Lottery very much took centre stage. Sales throughout the month-long World Cup totalled a staggering CNY 46.34 billion ($6.87 billion) alone, at a margin of roughly 18 percent, meaning gross revenue topped CNY 8 billion for the tournament. Single day sales for the final between France and Croatia smashed previous records, clocking in at CNY 2.74 billion ($406 million). These impressive figures – almost four times those recorded during the 2014 World Cup –
were powered by an extended product portfolio which offers customers greater freedom to select the types of bets they want to place. According to Chen, while there is no timeline nor discussions, to legalize sports betting formally, it is likely that the scope of the Sports Lottery will continue to be expanded towards something approaching sportsbook. “The central government has developed an aggressive plan to promote the sports industry, and it has mentioned that it will explore new types of sports betting,” he said. Professor Su Guojing, lottery expert and founder of the China Lottery Industry Salon, concurs: “In order to develop and push the Chinese sports industry, the Sports Lottery will gradually expand and open, for example to incorporate Chinese football,” he told AGB. Despite the strong performance in 2018, the biggest question on the future of China’s lottery sector is whether online sales will once again be permitted. Online lottery sales were suspended in March 2015 on what was, at the time, described
