Beijing Company Brings Wireless Lottery Sales to China

30 April 2001
A small Beijing wireless technology application development company is breaking new ground by creating a platform to distribute lottery tickets through wireless phones and has gotten a leg up in a highly competitive market.

Newpalm China Information Technology Ltd. has developed a system that enables users to purchase their lottery tickets through wireless phones. The new service could change the way the extremely popular Chinese Lottery is run.

Albert Lam, COO of Newpalm, said the new technology spent a longtime under development.

"We started to investigate the possibility of using mobile phone as a tool to buy lottery tickets about eight months ago," he said. "We noticed that there are often a long queue lining up at the lottery retail shops, which led to us to develop a solution platform in conjunction with a wireless operator and lottery company to offer an easier way to purchase the lottery tickets."

That process saw Newpalm partner with the Welfare Lottery Bureau of Heilongjiang for the rights to sell the tickets and China Mobile Communications Corp. and China Unicom Group--the country's two biggest wireless service providers--to carry the option for their subscribers.

Lam said the business plan of selling lottery tickets is loaded with positives.

"Wireless lottery takes advantage of the unique characteristics of mobile phone which are (a) personal (one number per phone) and (b) real time (don't need to wait in the queue)," he said.

In addition China offers an enormous market compared to the rest of the world, according to Lam.

"More importantly, there are more than 100 million cellular phone users in China and still growing," he said. "This provides a good platform for mobile lottery."

Through the system, users purchase prepaid cards through the lottery office in Heilongjiang, located in the northeast. The cards range in price from 50 yuan to 200 yuan ($6.04 to $24.16) and come equipped with a numerical pass code which the user keys in to buy a virtual lottery ticket. The pass code is sent using SMS (short messaging services), a basic feature on most cell phones. Another SMS message is sent to the user containing their lottery numbers. The ticket costs the same to the user, but a small fee is charged by the carrier for each SMS sent.

Prizes in the lottery have reached $5 million yuan ($604,000) and drawings are held twice a week.

Although the system was launched officially just weeks ago, Lam said the response has been good.

"Initial response has been quite positive as the mobile method provides three key advantages," he said. "It creates the ability to buy lottery any time any place. It also sends automatic notification of winning via mobile phone short message. The system also offers automatic deposit of winning prize money on small wins. All this is made possible because mobile phone and phone number is unique."

Large wins must be picked up in person, according to Lam.

It is no surprise that Asia would bring about the first company to offer such groundbreaking wireless technology. Lam admits Asia, especially China, is unique with its wireless use.

"The Asia market is quite different from that of the U.S. in that the Internet penetration is low but mobile usage is high," he said. "People are always on the move in Asia due to small living space at home. We strongly believe that it will be just a matter of time that wireless data application will be proliferated in other parts of the world."

Lam feels the wireless platform offers options other medium can’t.

"Wireless Internet/data service is personal, transactional, location based and real-time," he said. "only you send the info interested to you--stock, lottery, flower purchase. The system can track your location via cellular base station and send you the required information."

There are hopes for taking the technology outside Asia, but Lam said perfecting the existing system is the main focus right now.

"We want to roll out the service in China first," he said. "We believe the technology and concept are applicable and easily adaptable to other countries. We also have a real time lottery software platform that also has potential to roll out to other countries."

Lam didn’t want to disclose sales projections, but he did say the company is working with the Bureau and hopes to be a leader in the wireless sale of tickets.

The Chinese Lottery brought in an estimated $6 billion last year between its new sports lottery and the traditional welfare lottery. This figure is expected to double within the next two years.