China Sees Rise In Lottery Sales As It Imposes Record Fine

Chinese lottery sales picked up in March after retailers began staggered re-openings and a record financial penalty was imposed on an online gaming payment provider by Chinese authorities.

Figures released Saturday by China’s Ministry of Finance show lottery revenues of RMB10.5b (US$ 1.5b) in March, a 70 percent decline from the same month last year but up sharply from just RMB1 m in February as retailers gradually resumed operations after their lengthy COVID-19 pandemic shutdown.

Overall revenues were down 64.5 percent in the first quarter of 2020 to RMB37.7b, with sports lottery revenues (RMB19.65b, -65.7 percent) still managing to retain their lead over the competing welfare lottery (RMB18.05b, -63.2 percent) amid the mass cancellation of major sporting events.

Lottery operators in Beijing reopened after a 105-day long closure this week making it the last region in China to relaunch operations. Early reports indicated sales were slow, but retailers are hopeful that the resumption of Germany’s Bundesliga season later this month will help draw customers of sports lottery back to the shops.

China’s war against unauthorised online gambling, meanwhile, shows no signs of letting up. The People’s Bank of China (PBOC) reported on April 29 that it has placed a penalty of RMB65.9 m (US$ 9.3 m) on Allscore Payment Service Co Ltd, a processor based in Beijing operated by Germany’s Wirecard AG in 80 per cent.

Caixin reported Allscore was punished for facilitating transactions between Chinese citizens and non-China based online gambling sites. Besides the financial fine, the PBOC also confiscated about RMB50 m of Allscore revenue obtained from these transactions.

Allscore CEO Lin Yao and risk manager Zhang Yue were individually fined RMB450k and RMB200k for their positions in the scandals, respectively. Both men have issued formal alerts, and based on his ties to past gambling-related payment crackdowns Lin seems to be truly on thin ice.

China’s Public Security Ministry has been ratcheting up its late anti-online gambling rhetoric, with a particular emphasis on moving money through mainstream online processors or underground banking.

Last November, Chinese authorities levied an RMB29.4 m penalty for illegal gambling transactions on Internet Banking Online (Beijing) Technology Co Ltd, aka Chinabank Payments, a Beijing-based processor operated by JD Finance.