China Cracks Down on ‘High Frequency’ Lottery Betting

Posted on October 29, 2020

Lottery betting fans in China are about to find that their favoured activity is going to face further restrictions, with China’s Ministries of Finance and Civil Affairs set to limit how lottery betting is administered in the People’s Republic.

Last week, the joint Ministries issued a statement asserting that there was to be an “orderly delisting” of certain types of lottery games. The games are those that feature only a short duration of time between the player buying a ticket and learning the outcome of their bet.

This follows on from another move in January 2019 that saw China order its sports and lottery welfare administrators to end the promotion of what were described as high-frequency sports and quick-opening lottery products. These products were apparently being bought in huge quantities by impatient punters – something the Chinese authorities saw as damaging and irrational.

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The authorities claimed that their earlier restrictions had “played a positive role in curbing the unauthorized use of the Internet to sell lottery tickets and restrict large-value betting.” Despite the apparent success of those measures, though, it is now felt that further curbs are needed in order to maintain control of the situation.

The latest news is sure to dismay China’s lottery providers, who were already under pressure, as well as UK operators like GVC Holdings. The Chinese lottery market has only recently begun growing again, after facing declines due to both the restrictions and the Covid-19 pandemic. There are concerns in the industry that these new restrictions will stymie that growth.

Fans of virtual sports betting guessing games will also see some curbs on their activities.  From November 1, lottery administrators in each province or autonomous territory will be limited to offering a single quick-draw product. This will include virtual sports guessing games.

After next year’s annual Spring Festival holiday, “all high-frequency quick-open games will stop selling.” The country’s lottery administrators will now be held responsible for ensuring that none of their sales agents flout the new regulations.

Customers will be informed of the changes, and any money still held in prize pools will be distributed in a responsible fashion. The Chinese authorities insist that the products offered by lottery providers must now be “less irritating, lowly addictive, and highly entertaining.”

The changes in regulation have caused ripples of concern among operators that are active in the Chinese market. AGTech Holdings, who are Hong Kong-listed, has for many years provided its e-Ball Lottery virtual football product to the lottery administrators in Jiangsu province and a Lucky Racing Formula 1 product in Hunan.

Earlier this week, AGTech warned investors that it was conducting internal assessments on the impact of the changes on its operations. The products that are set to be further restricted accounted for 24.7% and 20.1% respectively of AGTech’s overall revenue in 2018 and 2019.

AGTech worked in partnership with UK bookie Ladbrokes on the Lucky Racing product. Ladbrokes, better known in the UK for offering US presidential election 2020 betting and UK football betting sites, is part of GVC Holdings.

GVC Holdings retains a 49% stake in the AGTech Holdings joint venture. It is yet to offer public comment on the new restrictions in China.

Nathalie Moran Avatar
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Nathalie Moran

Malta-based journalist and content editor, with a master’s degree in International Media Cultural Work and an interest for online games. A fan of the old school internet aesthetic and pixel image designs, her favorite games include The Legend of Zelda, Super Mario 3, and more recently Fall Guys.

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