USD or Crypto? Chinese Lottery Provider to Choose for Share Sale as China Cracks Down on Online Gambling

As China’s crack down on cross-border online gambling continues, a top online sports lottery service provider in China is likely to add Bitcoin to the game as it announces a definitive share subscription agreement that would be settled in U.S. dollars or in cryptocurrencies. made an agreement to issue and sell newly-issued Class A ordinary shares of its company to Hong Kong-incorporated Good Luck Information Technology. The deal will see Good Luck Information purchase 85,572,963 Class A Shares for approximately US$23 million at US$0.269 per share to be settled in U.S. dollars or in cryptocurrencies, including Bitcoin, a news release from the company says. 

It adds that the final settlement currency would still have to be determined by the company, which also acts as an aggregator and processor of lottery purchase orders from its registered user accounts, in the one month of the date of the agreement. 

Bitcoin use a plus for

The news of the agreement on Monday Dec 21 saw the company’s stock rise by 98.14% to a price of $5.17.

With the mainstream media attention that Bitcoin has been getting especially following a price spike, coupled with the company’s plan “to explore business opportunities in the blockchain and cryptocurrency industries based on some success experience of its associate, Loto Interactive Limited”, getting to proceed with using cryptocurrencies in the sales will likely increase its business’ overall chances at success.

Also, as one of two entities that have been approved by the Ministry of Finance to provide online lottery sales services on behalf of the China Sports Lottery Administration Center, the government authority in charge of issuing and sale of sports lottery products in China, succeeding with a Bitcoin share sale will make it one of the first to do so considering the Chinese government’s approach to this emerging asset class.

However, this is not likely to be the case.

Key hindrances to’s Bitcoin use in share sale

Last month, the China Construction Bank run by the Ministry of Finance, had to pull back out of a partnership with a Labuan-based fintech company, Fusang, on a planned sale of about $3 billion worth of debt using blockchain technology. 

The bond on blockchain proof-of-concept was later completed but not as the sale that was originally planned and promoted to be sold to retail investors using U.S. dollar or cryptocurrencies like Bitcoin which was to be facilitated by Fusang’s digital asset exchange arm – that is officially licensed by regulators in Malaysia – before it was called off. 

There is also the issue of an increase in online gambling. Citing data from the Ministry of Public Security, Caixin Global reports that Chinese police have cracked down on 1,700 online gambling platforms and 1,400 underground banks involving more than CNY1 trillion ($153 billion) of illegal transactions in the first nine months of 2020. 

The data show a jump in the number of reported cases when compared with the 7,200 online gambling cases recorded in 2019 for a total of CNY 18 billion.

With Tether Ltd’s USDT cryptocurrency cited as often being used to help illegal gamblers hide money from authorities in China, even as Chinese authorities launched a nationwide “Card Breaking Campaign”  to track such illicit bank transactions, it remains to be seen whether would be able to go ahead with a cryptocurrency use. 


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