500.com Financials Looking Sour, Pending Update on Online Lottery Regulations
500.com Ltd. (NYSE: WBAI) reported Tuesday after markets closed that its revenue in the second quarter has declined, while losses mounted.
The online lottery operator, headquartered in Shenzhen, has been suffering from the tightened regulations in the industry implemented by Chinese authorities in 2015. The regulatory changes led to the suspension of WBAI's online sports lottery sales that year, as it stated in a number of official announcements.
Instead, the company has focused on expanding its physical lottery locations. Last year, it struck a deal with the China Sports Lottery Administration Center (CSLA) and is working with a number of provinces and cities to develop its physical channels for lottery sales.
For the second quarter this year, WBAI reported revenue of $1.6 million, down 63 percent year-over-year. Its net loss has more than tripled from last year to $20.1 million, or 47 cents per American depositary share, it said.
WBAI's chief executive, Zhengming Pan, said in the statement today that the company has been exploring various "promising initiatives. Among them, he listed the acquisition of The Multi Group, or TMG, in July 2017.
"We will continue to look for additional opportunities to enhance value for our shareholders," he added.
Operating expenses were $12.8 million in the second quarter, down 21 percent from the same period last year, dropping across all departments, according to the report.
As of June 30, WBAI said it had cash and cash equivalents of $45.5 million.
The company did not share guidance on upcoming quarters, pending "clear instructions as to the resumption date of online sports lottery sales from the Ministry of Finance," WBAI said.
WBAI's stock closed $11.04 per share Tuesday before its financials were released, up more than 10 percent on the day.
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