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Success Universe abandons lottery sales in mainland China

Casino developer Success Universe has announced that it is pulling out of its online lottery service provider business in the Mainland. In a filing with the Hong Kong Stock Exchange, the company, which also manages the Ponte 16 property in the MSAR, announced the sale of shares and loans of the subsidiary Honour Rich, amounting […]

Casino developer Success Universe has announced that it is pulling out of its online lottery service provider business in the Mainland. In a filing with the Hong Kong Stock Exchange, the company, which also manages the Ponte 16 property in the MSAR, announced the sale of shares and loans of the subsidiary Honour Rich, amounting to 80 per cent of the shares, as well as loans amounting to HK$12 million (US$1.54 million) to investment holding company Wide Fortune Group Limited.
The reason for the transaction, stated the company, is due to the ‘sustained losses incurred by the Honour Rich Group’, the net liabilities of the company and the outlook of the online lottery business in mainland China.
According to the filing, Honour Rich suffered losses of MOP19.14 million and MOP20.77 million in 2015 and 2016, respectively, and the net liabilities of the two respective years amounted to MOP69.39 million and MOP92.76 million.
The company referenced in its filings in 2015 and 2016 that the Chinese Ministry of Finance, the Ministry of Civil Affairs and the General Administration of Sports of China had announced the notice in the moratorium: ‘Issues Regarding Conducting Self-examination and Self-correction Activities of the Unauthorised Sale of Lottery through Internet’, leading to the firm’s decision to suspend the lottery business, which then resulted in an 88 per cent drop in revenue for the group in 2016.
The company further wrote that the cessation of the lottery business in the Mainland would be ‘relieving the Group from further need to inject working capital to sustain the operation of its business’ and allow for it to redeploy resources to ‘other investment opportunities’.
According to the company’s interim results posted earlier this month, Success Universe saw a 67 per cent increase in losses year-on-year, hitting HK$21.1 million for the first six months of this year.

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