The growing trend with the shrinking Chinese gambling market seems to rest on cutting the little guy out. Many big casinos have decided to part ways with the smaller junket operators, trimming some fat and making operations a bit more manageable. Coincidentally, the Chinese lottery is looking to do something similar, by removing some smaller online distributors of lottery products.
In fact, several of the China online platforms have recently suspended sales of lottery products. Included in the platforms are Tencent Holdings Ltd., Baidu Inc., Alibaba.com Ltd. And 500.com Ltd.
This stems from a report by the Beijing office of financial services firm North Square Blue Oak Ltd. The firm says it focuses heavily on China, “event-driven strategies” and exchange-traded funds. North Square Blue Oak said a major reason for the suspension was due to “illegal online practices” by some of the distributors.
The report said, “In cases where the odds of the bettor winning are unlikely, some agents have not registered the sale with the lottery center in order to keep all profits from the bet.” The firm suggests that the removal of some agents from the market and ongoing investigations would be enough to cut back dramatically on the sketchy practices.
The other solution provided would be for a greater share of commission towards the government fund. According to the firm, the commission amounts to around 30 percent of the lottery ticket price. In 2014, lottery ticket sales in mainland China soared 23.6 percent to $61.5 billion. There is no word when the ban will be lifted.
