Lottery suppliers to the Chinese market are diversifying because of a two-year suspension of interactive lottery sales but there are signs that the ban could be lifted.

The takeover of AGTech by Alibaba has subtly but fundamentally changed the nature of the company. For over a decade it has provided technology products for China’s Welfare and Sports lotteries and that continues to be the core business – for now.

Alibaba’s influence has made itself apparent immediately. During the first half of 2017, AGTech’s new Games and Entertainment business generated revenue of HK$17.1m, equivalent to nearly a third of the company’s total during the period. That represents pretty amazing growth for what is essentially a start-up, albeit one with huge backing.

This followed the roll out of casual and social games for mobile, including non-lottery play-for-fun and mind sports (skill) games, such as the Two-on-One competition poker game, which is not subject to lottery laws and regulations in China. These have been distributed across parent company Alibaba Group’s Taobao channel. The addition of mind sports to the AGTech portfolio is the first step towards the lottery supplier becoming a much more rounded business.

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