VODone bet on mobile lottery attracts big investor

VODone, a mainland internet video broadcast operator, expects its new mobile lottery business to have more than 3 million users and account for most of its revenue by next year, according to chairman Zhang Lijun.

That rosy outlook has encouraged global institutional asset management firm Och-Ziff to subscribe to 144 million new VODone shares for HK$79.2 million or 55 HK cents each, a 15 per cent discount to the stock's last closing price of 65 HK cents. Och-Ziff, which manages more than US$21 billion of assets, will hold about 10.52 per cent of VODone upon completion of the transaction.

VODone, partly owned by the Ministry of Civil Affairs, reached an agreement with the Heilongjiang Welfare Lottery Centre in April to become one of the first authorised mobile lottery betting service providers in the country.

The deal granted VODone the right to sell lottery tickets, which cost 2 yuan each, to all mobile-telephone subscribers on the mainland.

The company will share part of the revenue with the lottery centre, which sells about 2 billion yuan (HK$2.26 billion) worth of tickets annually through traditional agents and ranks among the country's top 10 in national welfare lottery sales.

Mr Zhang said VODone expected to generate 1 million mobile lottery users by the year-end and 3 million by June next year, a mainland lottery market share of about 5 per cent.

About 20,000 mobile-telephone users have so far downloaded the specific software used to participate in the country's mobile lottery service. Registered users wager through their handsets, with payment directly debited from their bank accounts.