An online company in China – 500.com – is planning for Chinese online sports betting via a US $150 million initial public offering in the USA after winning what sources conclude is tacit approval from China’s Ministry of Finance to develop a purpose built platform for legal online sports bets.
This is a huge change in the government approach to what they know is an out of control illegal internet betting on mainland China. Legal Chinese online sports betting in mainland China could be facing the biggest shake up in nearly two decades, with government-sanctioned online gambling.
A Chinese lottery industry source said, the tracking system will keep the gambler in touch with the data center making sure there will be no cross border betting. “If you had say an application on your phone for the new mainland online lottery, you would need to have it ‘talking’ to the national telecommunications system in China,” adding, “There will probably be a requirement that the app is linked to a global tracking system – making sure you are physically located in the right place in order to access the service legitimately,”
The Shenzhen-based 500.com Ltd has applied to list on the New York Stock Exchange under the symbol WBAI. Deutsche Bank AG is managing the offering. “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 Philippines, Macau, or Singapore,” one source opined.
“Investors and analysts in China only know about traditional casinos. Most of them don’t understand lotteries or Chinese online sports betting. Additionally, many of the investors in the lottery companies involved in China have at some stage lost money,” the industry insider said, then concluding, “For all those reasons, to go to the United States and say ‘We have got 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.”
