On September 5th, 2007, PacificNet Incorporated, a provider of gambling technology, e-commerce and Customer Relationship Management (CRM) announced that their subsidiaries in Mainland China, PacificNet Technology Limited in Shenzhen and PacificNet Games Limited have signed an agreement to get the 51% equity interest in Guangdong Poly Blue Express Communications Co., Limited.
The acquisition is expected to help PacificNet with the use of their subsidiaries to join China's rapidly developing gaming market and state lottery operations. The agreement states that PacificNet Technology Limited and PacificNet Games Limited will get 34 percent and 17 percent respectively of Guangdong Poly Blue Express Communications Co. Limited.
The central government in China has given the rights to issue two types of lottery, which are the China Welfare Lottery and Sports Lottery. The China Welfare Lottery Issuance Center was given authority to issue lotteries since 1987 and the China Sports Lottery Administration Center or CSLC since 1994.
Victor Tong, the President of PacificNet, said that they are very happy with the acquisition. E-Lottery has tremendous potential in China. The General Manager of Guangdong, Mr. Gu Hao, said that they are happy to have finished the acquisition of PacificNet. He said that with the development of the domestic lottery market more companies will try to get a part of the lottery growth.
According to the studies conducted by China's Ministry of Finance, the country's total lottery sales profit have been enjoying good growth in the past few years and have reached a historic high of 81.93 billion Yuan or $10.5 billion last year, an improvement of 10.54 Yuan from 2005's 71 billion Yuan or $8.6 billion. Analysts said that the lottery market of China will reach 200 billion Yuan or $25 billion in 2008.
Lottery experts in China predicted that the lottery market in country will improve to $34.5 billion by 2010. Just as the growth in Macau gambling was due to China's government drive to remodel Macau into a top entertainment hub in Asia.
It is generally believed that growth in the lottery market in China is due to the government's drive to stop illegal gaming. It is predicted that lottery products like keno lottery, scratch lottery and Video Lottery terminals will be more in demand.
[23-09]
John Sullivan
