Reporters learned during the interview that, represented by local lottery management institution officials, relevant personages hope to use market-oriented operations of lottery sales to break the traditional exclusive operation mode (lottery stores). However, the current problem is that various lottery companies have cooperated with local lottery management institutions, making online lottery sales get out of hand. So-called market-oriented sales, besides networking and expanding space, are not well-regarded.
Huge profit temptations make both local lottery management institutions and ordinary lottery companies unwilling to be regulated.
But neither of the two documents mentioned the supervision issues of online lottery sales, which disappointed many industry insiders. Previously, when the Ministry of Finance and the Ministry of Civil Affairs mentioned online lottery sales multiple times, they also indicated waiting for the "Detailed Rules" to be issued.
On February 12, the Ministry of Finance issued the "Notice". The Ministry of Finance had already fully published the "Detailed Rules" before this. Besides emphasizing the conscientious implementation of the detailed rules, the "Notice" also expressed that it would timely revise and issue the "Lottery Public Welfare Fund Management Measures", "Lottery Institution Financial Management Measures", and "Lottery Issuance and Sales Management Measures".
However, only a few among those with experience exist; more industry companies need substantial funds to win users and cooperation. Cooperation with each provincial lottery institution has always been mysterious, low-key, and difficult.
While Ms. Zhang was negotiating cooperation with Internet companies to seek user growth, various venture capitalists also approached her. "Industry companies with some experience will not lack money because investors came early for those who started early."
According to relevant regulations, currently, the issuance fee for computer lotteries, which dominate in terms of sales volume, is 15%, while traditional exclusive lottery sales stores extract about 7% of the issuance fee. Therefore, compared to lottery stores, online lottery sales obviously have greater profit margins.
Public data shows that in 2011, the national lottery sales increased by 33%, much higher than the 25% increase in 2009 and 2010. The introduction of the "Interim Measures" played an indispensable role. Prior to this, the "three ministries" and "seven ministries" issued multiple joint notices to suspend and prohibit online lottery sales.
Regarding the issue of insufficient supervision over online lottery sales, Cheng Yang once called for a solution through the joint efforts of "lottery institutions, industry experts, and online lottery merchants" at a national lottery conference.
Meanwhile, online lottery sales have rapidly grown from less than 1 billion yuan in 2007 to a scale of hundreds of billions of yuan in 2010, drawing high attention from various local welfare and sports lottery centers. In the eyes of local lottery managers, in those years, used for reminiscence, online lottery sales can be considered as a reliable growth point for serious layout and development.
Hao Cheng
"As long as any listed company spreads the news of discussing a cooperation intention with a certain province regarding lottery business or investing in a well-known online lottery website, the stock price often rises until there is no follow-up news." Ms. Zhang said that among the numerous investors approaching, there are also listed companies' figures. However, industry companies would consider acting low-key due to not having obtained the "license".
Due to huge profit temptations, no one wants to be supervised. Multiple local welfare lottery directors told reporters that only after the "chaotic battle" ends can the rules take effect. As for risks, "It's not visible now, nor have there been any major cases." A deputy director of the welfare lottery center of a major southern lottery province told reporters.
From October 2010 when the Ministry of Finance released the "Interim Measures for the Administration of Internet Lottery Sales" (hereinafter referred to as the "Interim Measures") until now, related detailed implementation rules have not yet been introduced, and the regulatory situation regarding the specified investment threshold of 50 million yuan has not been made public. In fact, online lottery sales have continued in a "non-regulated" state prior to 2010. However, due to the introduction of the "Interim Measures," online lottery sales reached 14 billion yuan in 2011.
According to data published by the Ministry of Finance, in 2011, national lottery sales reached 221.582 billion yuan, increasing by 33.3%. Industry analysis believes that internet lottery sales in the past year were around 14 billion yuan, accounting for more than 6% of the total, growing nearly 50%.
Neither the "Detailed Rules" nor the "Notice" touched on the "online lottery sales" with skyrocketing sales volumes, and its regulation remains a blind spot, hyaluronic acid breast enhancement injections, Shanghai World Expo 3-day tour guide (Part II).
Regarding this issue, reporters contacted the General Office of the Ministry of Finance, which supervises online lottery sales, but officials from the office did not respond to why the "Detailed Rules" did not cover online lottery sales.
Although there was no explicit mention of the regulatory issues of online lottery sales, the statement in the "Notice" that "the Ministry of Finance will reduce the proportion of lottery issuance fees appropriately according to the provisions of the Regulations as the scale of lottery issuance expands and the number of lottery types increases" sparked imagination among industry insiders.
Risk Controversy
Regulatory Gap
In August 2010, the Ministry of Finance issued the "Draft Interim Measures for the Administration of Internet Lottery Sales" and officially introduced the "Interim Measures" two months later. This move was considered "too hasty" by Wang Xuehong, executive director of the Peking University China Charity Lottery Research Institute.
The share prices of many listed companies soared due to the news of their investments in well-known online lottery websites. Share to: Weibo recommendation | Sina Technology Official Weibo
In mid-February, the Ministry of Finance successively issued the "Implementation Rules of the Lottery Management Regulations" (hereinafter referred to as the "Rules") and the "Notice on Implementing the Implementation Rules of the Lottery Management Regulations" (hereinafter referred to as the "Notice"), proposing more detailed requirements for the management of lottery sales and public welfare funds. However, neither of these two documents mentioned the much-discussed issue of online lottery sales supervision, where two vendors resisted law enforcement and injured urban management officers, resulting in criminal sentences.
"Firstly, you must overcome the hurdle of a registered capital of 50 million yuan, then your registered users should be numerous and of high quality. Even if you cannot obtain a license, you can still use this as capital to negotiate cooperation with licensed companies." Ms. Zhang, manager of an online lottery sales company in Beijing, told reporters that in the past year, her company first increased its registered capital and then negotiated cooperation with various Internet companies. "From Tencent to 360, and then to group-buying websites, we have talked with dozens of Internet companies in the past year."
In fact, the regulatory issue of online lottery sales was formally proposed by the management department in 2010. That year, the scale of online lottery sales reached 10 billion RMB, increasing by 25% compared to 2009.
Despite this, the "license" management approach proposed in the "Interim Measures" received affirmation. The industry believed that the 500 million yuan investment threshold set for online lottery sales enhanced its safety.
"The rules were issued, but did not mention online lottery sales, which is equivalent to telling everyone that it will appear in the 'Lottery Issuance and Sales Management Measures', because the core of online lottery sales lies in the difference between the sales channels and traditional exclusive stores, rather than entirely new lottery varieties or play methods." Renowned lottery expert Cheng Yang told reporters during the interview.
Wang Xuehong believed that apart from the short consultation period, according to the relevant provisions of the "Lottery Management Regulations" implemented on July 1, 2009, issuing interim measures should have held expert seminars and hearings, but in fact, neither of them were conducted.
Capital Chaos
"Cooperation definitely exists. Among all provincial welfare and sports lotteries nationwide, you can hardly find a few that have not cooperated with industry companies for online lottery sales. Why? Online sales achieve cross-provincial operations, allowing them to share in the profits of high-sales provinces, thus increasing their own sales." The deputy director of the aforementioned local welfare lottery center admitted that his institution basically splits evenly with the industry companies.