SBC News Voice of the Sports Betting Industry
Further investor concerns have arisen over Chinese sports lottery provider 500.com’s operating viability.
Bloomberg News reported that hedge fund Prime Capital Management Co. had scaled back its investment in the Chinese operator from $93m to $27 million. Prime Capital Co. controlled by Chinese investor Liu Yijun has shrunk its stake in 500.com’s Wall Street traded shares to less than 5%, after previously being its largest stakeholder at 16%.
In September market concerns had arisen with regards to 500.com’s legal and regulatory requirements for operating gambling services in China.
The operator had also been accused of having inadequate accounting practices by Jason Moser, Senior Business Analyst for Motley Fool, who claimed that the company had failed to meet US corporate accounting standards.
500.com senior management hit back at the claims made against their firm, stating to business sources that it had been granted operational approval by the Ministry of Finance of the People’s Republic of China. The firm further stated that the allegation of its operational legality were completely unfounded and led by speculation rather than fact.
This week Bloomberg News reported that several investors had questioned the long-term operations potential and legitimacy of 500.com’s license with the Chinese government. Investors were further concerned with regards to several red flags concerning the lottery providers operations.
In May, the Jinghua Times reported that China’s Sports Lottery Administration Center had not authorised any sports gambling websites and that online lottery sales are illegal without authorisation.
Bloomberg News reported that Shares in 500.com more than tripled in their first three months of trading before slumping 42 percent since their March. 500.com share price fell 6.8% to $28.02 on 5 November.
