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Hong Kong Company Wins China's First Internet Lottery
Contract
VODOne wins online lottery agent prizes
The appointment as the first online agent for China's popular welfare
lottery has been won by Hong Kong-listed, Beijing-backed internet
video venture VODOne, company chairman Zhang Lijun announced this
week.
VODOne Telemedia has been appointed official agent, and is a locally-registered
company that is majority state-owned, in which the China Association
of Social Workers holds a 47 percent stake. VODOne says it has a
50-year exclusive contract with VODOne Telemedia – in which
Mr Zhang also holds a large stake.
The China Association of Social Workers, which oversees the lottery
gave its approval to VODOne in a decision which deputy head Zhang
promises tougher action against unauthorised sales over the internet.
Interviewed by the UK Financial Times newspaper, Zhang said, “I
will be involved in the very important job of cleaning up...online
sales. Our company enjoys a very special position.”
There has been a strong drive among Beijing officials to promote
and expand the country’s welfare and sports lottery systems
– the only legal forms of gambling at present in China –
both to raise funds and to provide an alternative to illegal betting.
The VODOne contract indicates a merging of government and private
investment and expertise in politically or socially sensitive sectors
such as gaming and Internet media.
VODOne aims to account for 50-70 percent of the estimated Rmb 12
billion of a total Rmb 100 billion ($13 billion) in annual Chinese
lottery sales that it says are currently bought through unregulated
online vendors. Chinese state media have put total lottery sales
at Rmb 82 billion in 2006, with the welfare lottery – the
larger of the two – growing at 20 percent a year.
Online sales have helped fuel the growth because ordinary tickets
can only be bought through authorised retail outlets. It is feared
that "unofficial" Internet retailers may cheat lottery
gamblers.
VODOne and the Social Workers Association will divide the commission
on sales, which is understood to be between 7 and 10 percent.
Illegal gambling in China was estimated by state media in 2005
to be as high as Rmb 700 billion. Huge sums are believed to leave
the country as determined Chinese players pursue their passion for
gambling by making trips to Macao, Burma, North Korea and Las Vegas.
The hopes of gambling companies were raised recently by reports
that the China Communist Youth League was interested in setting
up a joint venture with foreign investors to offer online poker
to young people, but further reportage on this initiative has been
sparse.
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