Can Alibaba hit Chinese lottery jackpot after acquisition?

Can Alibaba hit Chinese lottery jackpot after acquisition?

Tuesday, March 8, 2016 Totally Gaming
The retail giant has bought a majority share of Hong Kong lottery firm AGTech

A subsidiary of Chinese online retail giant Alibaba Group is to acquire control of Hong Kong-listed lottery operator AGTech.

The deal, worth around HK$2.39bn (€279.5m/$308.0m), will see Ali Fortune Investment, which is 60 per-cent owned by Alibaba, buy around 59.5 per cent of AGTech.

China Money Network reported that Alibaba plans to further expand the company's lottery, games, hardware and distribution in China, potentially leveraging the internet giant's mobile payment methods, e-commerce channels and various other platforms to help AGTech expand aggressively.

Alibaba is said to be attracted by the possibility of lifting lottery participation in mainland China, which is dwarfed by the 56 per cent rate in Hong Kong. The mainland authorities last year ordered a suspension of online sales of tickets for China’s two official lotteries – the welfare lottery and the sports lottery – as part of a crackdown on fraud.

Total sales of official lottery products in China fell 3.8 percent year-on-year in 2015, but nonetheless reached $56.4bn in 2015, according to data from the country’s Ministry of Finance.

After the completion of the deal, Alibaba will obtain the right to appoint five non-executive directors to the nine-person board of AGTech. 

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