IAG 2006-08-09 Aug-Sep - page 8-9

hinese are reputed to be the most
fervent gamblers in the world, yet, until re-
cently, the range of legal gambling options
available inChinahasbeenseverely restrict-
ed. Several journalists – seeming to delight
in quaint explanations – point out that the
Communist Party regards “eroticism, gam-
bling andnarcotics”as“the threeevils.”Still,
the Chinese government has decided that
expanding the country’s lottery offerings is
anecessaryevil,andChina lotteryoperators
and suppliers are set to reap big rewards.
Unfortunately, the rewards are not arriv-
ing as quickly or in as much abundance as
those companies’ shareholders had hoped,
MainlandChina is expanding its lotterymenu. The industry has huge growth potential, but the stock prices
of the companies involved, touted last year as “sure bets,” have recently given in to gravity
and stratospheric stock price surges have
turned to slumps.
The Lesser Evil
Premier DengXiaoping realised that ideolo-
gyhad togiveway toeconomicpragmatism
if thePartywas tosurvive,and introducedhis
“socialismwithChinese characteristics” from
the late seventies.This,alongwith the recog-
nition that illegal gamblingwas rampant in
the country, prompted the introduction of
welfare lotteries in 1987 in order to provide
a regulated outlet for mainlanders to fulfil
their gambling desires, with lottery profits
going to fund social welfare – the need for
which has increased as a result of the eco-
nomic reforms, which led tomassive layoffs
from state-ownedenterprises.
Two agencies oversee lotteries in China.
The China Welfare Lottery Issuance Cen-
tre (CWLC) was established in 1987 to raise
funds for social welfare. The China Sports
Lottery Administration Centre (CSLC) was
set up in 1994 to fund sports development,
and in addition to lottery-type games, also
offers limited football bettingonmatches in
themajor European leagues.Chinese lottery
saleshavegrownat acompoundannual rate
of 30% since 1987 to reachUS$8.6 billion in
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