This page contains a Flash digital edition of a book.
GUEST COLUMN


Getting on the slow boat


Despite a clampdown last year on online lottery sales, there are signs that China could offer opportunities for digital gaming firms that can deliver innovation. So says Mediatech Solutions’ Head of Asia-Pacific, Tom Moester.


W


hen China’s General Administration of Sport announced in February of last year that it was suspending all online sales of lottery tickets


in the country, it was seen as a major step back for a jurisdiction with the potential to completely transform global gaming. Some have taken the crackdown on digital


sales, which had previously spurred growth in a number of online lottery retailers including 500.com, as the end of the road for egaming in China. However, I would argue that there are signs that China might be beginning to open up online gaming, and there will be opportunities for foreign firms – as long as they understand the market and begin positioning themselves now. It is no secret that China is the world’s largest gambling jurisdiction by volumes – if we include the enormous black market. But there are signs that at the highest levels of the Chinese government, there is an increasing desire to begin regulating this market and channelling customers towards legal means of gaming. You only have to look at the growth in


China’s state-run lotteries to see how much of an appetite there is for these forms of regulated gaming; China’s Ministry of Finance recently announced that overall lottery sales for the month of May were up 7.8% to a staggering RMB34.6bn (£4.02bn). The growth figures are even more


encouraging if you look at match betting lottery sales – the category of lottery tickets closest to what we would understand as a traditional sports bet. In March and April of this year those sales


increased 71 percent and 49 percent versus the same months in 2015. Even bigger rises are expected over a summer which has been


96 SEPTEMBER 2016


crammed with major sporting events. Before the ban on online lottery sales, the


digital channel was accounting for more than a quarter of total sales in some provinces. With smartphone penetration in China at 58% according to the Pew Research Center, the potential is clearly huge.


Looking to the future


So how can operators and providers outside of China tap into this opportunity? At the moment most are taking a watching brief, but there are signs that opportunities might emerge sooner rather than later. With the Chinese government keen to


diversify its economy and raise more tax income, the already huge lottery sector is set for further growth and it is hard to see how it can be kept offline much longer. However, past years have shown that strong regulation is needed.


the ultimate regulator, and we might see a fuller and tighter overall regulatory framework introduced which at the same time has more efficient administrative processes in the provinces. It is believed to be just a matter of time until new products in the mobile channel can be introduced.


What will be most important for operators


As such, firms which can create products which innovate around the lottery space without cannibalising the existing offer and complying with strong international regulatory standards may eventually find that they are welcomed. Of course, the opaque nature of Chinese


government makes the exact form of this tough to predict, but it does appear that central government is beginning to grant greater autonomy to the provinces on elements like advertising for existing approved games and pay-out levels. China’s Ministry of Finance, however, remains


and providers looking at the market is that they do not enter with the belief that the products and protocols which have worked in Europe or elsewhere will be replicable in China. As a number of major multi-nationals have found over the years, doing business in China is often a very different experience to what they are accustomed to. It is no coincidence that one of the European operators most active in China, Ladbrokes, entered via a joint venture with a Hong Kong company. For those without this option, the key will be


having boots on the ground, plenty of local expertise and a lot of patience. Although we may be years away from a fully opened Chinese egaming sector, for any firms wanting a long term future in the market, now is the time to begin exploring the possibilities.


Tom Moester is Mediatech Solutions’ head of Asia Pacific, where he is responsible for the provider’s growth across the region.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102