Reports out of China suggest that legalized online sportsbetting may be coming to the country's mainland, as betting website 500.com has been given the go ahead to develop an online betting platform by the Chinese Ministry of Finance.
If the reports are true, they would be revolutionary for the country, which has had a pretty substantial lockdown on gambling, save for Macau and various lotteries.
500.com would be forced to work with the national Sports Lottery as well as the Welfare Lottery, which use a portion of revenues to help fund charitable causes.
Currently many Chinese use unofficial means to gamble, as the return to player percentages in lotteries is 69% at maximum, which is low when compared to the 95-98% return given by offshore markets.
Commenting on the issue a lottery insider said, "Most people don’t use the government channels. Making it available on the Internet is going to make it easier for some customers and no doubt that will stimulate some demand. But until you fix that fundamental pricing problem you’re still going to struggle to capture the huge market that is obviously there.”
500.com is set to launch a US IPO attempt, during which time it will seek to raise the capital it needs to expand its operations. The company is launching its stock under the WBAI symbol on the US New York Stock Exchange, as the company is more likely to get a higher valuation than if it were introduced on the Hong Kong exchange.
Speaking as to why this is the case, the lottery insider said, “The Hong Kong stock market is not a particularly good place to do an IPO if you’re a gaming company that doesn’t have casinos in Macau or the Philippines or Singapore."
“Investors and analysts in China only know about traditional casinos. Most of them don’t understand lotteries, sports betting etc. To go to the United States and say ‘We have access to the China gambling market, we are legitimate, and are using the Internet’ – the investors’ eyes will probably light up and the firm will probably get a higher valuation.”