AGTech to fix odds in time for Olympics

PUBLISHED : Tuesday, 12 June, 2007, 12:00am
UPDATED : Tuesday, 12 June, 2007, 12:00am
 

Mainland sports betting outlets to double to 3,000


Mainland lottery investor AGTech Holdings expects to receive approval from the State Council to launch fixed-odds sports betting products in time for next year's Beijing Olympics, according to chairman and majority shareholder John Sun Ho.


'Fixed-odds betting is already on the government's agenda and we hope it can roll out in time for the Olympics,' said Mr Ho.


The company also plans to double the number of retail sports betting shops it manages on the mainland to 3,000 outlets by the end of next year, Mr Sun said.


Unlike with traditional lotteries, in which the winnings are based on the amount put into the pool by gamblers, fixed-odds customers stake their wagers against a bookmaker - in this case the government - for known odds.


AGTech, which partners with provincial branches of the Sports Lottery, is betting that a relaxation of the ban on bookmaking in the run up to the Olympics will pave the way for rapid growth.


The company in January formed a joint venture with London-based Ladbrokes, the world's largest retail betting firm, that aims to develop and sell fixed-odds betting products on the mainland.


The company intends to use existing cash, accrued profit and additional proceeds from a HK$581 million share placement last month to expand to at least 3,000 shops by the end of next year, a target Mr Sun described as 'very conservative'.


Last month, AGTech paid HK$777.7 million for loss-making Shining China, a private firm that manages 1,500 retail Sports Lottery betting outlets in Chongqing, Hunan and Jiangxi.


AGTech plans to attract new customers by introducing themed products and services like remote betting, and high-frequency pool betting on virtual games in bars and karaoke lounges.


The management expects the Ministry of Finance to approve the Sports Lottery's first high-frequency game by the fourth quarter of this year. The Grand Prix-themed virtual car race - which will be held every five minutes compared with the twice-a-week lottery - was developed in partnership with Ladbrokes.


But the game will operate as a variant of parimutuel betting - with the payout ratio ultimately fixed at 65 per cent of the total pool and the maximum wager per ticket capped at 20,000 yuan.


'It is a compromise between full-on sports betting and introductory sports betting,' said AGTech executive director and head of gaming Rob Ryan. 'This is sports betting 101.'


A move by Beijing to legalise and regulate bookmaking would be a targeted blow against black market gambling on the mainland, worth an estimated HK$700 billion a year. By comparison the mainland's two state-run lotteries, the China Welfare Lottery Issuance Centre and the China Sports Lottery, generated HK$80 billion in revenue last year.


The state lotteries are permitted to offer only traditional prize pools or variations on parimutuel betting. While this includes a variety of casino-themed games like the video poker offered by provincial branches of the Welfare Lottery, all payouts are determined by a random-number generator and the ultimate payout ratio is fixed on a nationwide basis.


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