The stakes are high but so too are the rewards for western companies that decide to take a bet on China's gambling market.
While gambling is still officially illegal in the PRC, the
government turns a blind eye to state lotteries and that has encouraged
big foreign companies with lottery experience elsewhere to now turn
their sights on China.
Its not hard to see why. Lottery sales reached more than $10.5bn
last year and are currently growing at compound annual growth rate of
Ladbrokes, International Game Technology and Scientific Games have
all announced Chinese lottery ventures this year and the Financial
Times looks at their strategies and alliances in this article.
Interestingly, no foreign player has chosen to go it alone and,
because of the sensitivity surrounding gambling, they restrict their
role to technology supplier or distributor rather than lottery operator.
Chinese gaming is far from a sure thing and there have been severe
policy reversals before, the FT warns. Regulatory uncertainty remains
pervasive, with different policies in different parts of the country.
Those vendors that get on the wrong side of local authorities, risk
a similar plight to that of London-listed Betex, a small supplier to
China's sports lottery, whose shares were suspended last month when
staff were detained by police. More on Betex' woes in this EngagingChina post.
Other companies mentioned in the FT story include Australia's Tabcorp, AGTech, China LotSynergy and HK-listed VODOne.