New online lottery deal signed by AGTech Holdings

Optimistically paving the way for a possible shift in the current ban on Chinese online lottery sales, the Hong Kong-based lottery tech company AGTech has reached agreement with the Alipay Lottery Channel which could see it operating the channel in return for a fifty percent share in the revenue generated.

However, the deal is contingent on the Chinese government lifting the current suspension of online lottery sales, a business-killing “temporary” ban that has now been in force for two years and was imposed to sort out corruption in the system.

In a way the arrangement is incestuous: Alipay is a major online payment processor in the region, and through Ant Financial Services is associated with the giant Alibaba e-commerce group… which acquired AGTech a year ago (see previous report).

The agreement also makes provision for AGTech to provide other content and games not hampered by the online lottery sales ban, which will enable the provider to ramp up its online presence and business prospects, although the lifting of the online lottery sales ban remains the main prize.

Although it has had to grapple with declining lottery hardware sales and other vicissitudes over the past year, AGTech has, through cutbacks and astute management, achieved a rise in gross profit to HK$73.3 million (FY 2015: HK$69 million), according to its FY 2016 report.

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