CY Foundation Group, which partners with a unit of the Communist Youth League to run online poker tournaments, plans to open up to 1,500 franchised internet gaming complexes across 30 mainland cities over the next two to three years, according to chairman Teddy Cheng Zhi-de. The ambitious target follows last Friday's opening of the company's first Enternet entertainment centre, an 18,000 square foot second-floor complex in Shanghai's Hongkou district. The centre features a traditional internet cafe, a tournament gaming area, a state-run lottery outlet, digital cinemas and VIP gaming rooms complete with a 10-seat electronic poker table. CY Foundation plans to open as many as 50 outlets per city in 30 mainland cities by converting and expanding existing internet cafes into franchised Enternet outlets. The company also organises cash and merchandise prize tournaments in franchised and independent internet cafes and is targeting their introduction in 2,000 cafes by the end of the year, and 8,000 locations by the end of next year, according to management. Plans are underway to launch a 100,000-player mega tournament with a cash prize of as much as three million yuan. Gambling remains illegal on the mainland apart from pari-mutuels offered by two state-run lotteries which, in addition to traditional lotto draws, have grown in recent years to offer slot-machine-like video lottery terminals, keno and limited pool-betting on sports matches. CY Foundation's ability to organise cash prize tournaments relies on its unique tie-up with the Communist Youth League whose portfolio includes regulating internet cafes, as well as individual content approvals obtained from the Ministry of Culture for electronic game titles. In addition, the high-profile connections maintained by company executives may also help open doors on the mainland. Mr Cheng is the nephew of National People's Congress Standing Committee vice-chairman Cheng Siwei. To date, CY Foundation has organised three beta tournaments in Shanghai for mahjong and doudizhu, or 'fight the landlord'. Each self-owned Enternet outlet costs about eight million yuan to develop, and the company sells five-year licences to franchisees for one million yuan. Where possible, the firm plans to locate Enternet shops near or attached to retail branches of the China Welfare Lottery Issuance Centre or the Sports Lottery Administration Centre. For tournaments CY Foundation will collect an undisclosed percentage of paid-up entry fees as a commission, which it will share with internet cafe owners and software providers.
