Chinese sports lottery operator 500.com confirmed that Founder Man San Law was stepping down as CEO of the company, following the publication of dismal performance results for Q1 2015 operating period.
The operator missed all key performance targets, as it recorded sales of $15.9 million down 32% on 2014 figures. The New York listed lottery operator would record a net loss of $8.4 million for the opening period of 2015.
At present 500.com is suspended from selling lottery services in Chinese jurisdictions, following the March announcement by the Chinese Ministry of Finance of the termination of all lottery sales through digital verticals and third party agents.
The suspension has seen a dramatic decline in the number of 500.com customers which is reported to have fell 43% to +800,000 in Q1 2015. In the earnings statement 500.com commented:
“As a result of the provincial sport lottery administration centres’ decision to temporarily suspend accepting online lottery orders, or the temporary suspension, 500.com’s transaction volume decreased significantly. The Company recorded operating loss for the first quarter of 2015 and is currently not generating any revenue due to the temporary suspension.”
Following its Chinese lottery suspension In March, a syndicate of US law firms representing 500.com investors filed a federal securities fraud class action, claiming that the operator and its governance misled investors in its 2013 IPO prospectus, by stating that the company had the legal authorization to issue and sell lottery products in China.