Taipei, March 5 (CNA) A regulation mistake is the main reason that led to the poor performance of Taiwan's sports lottery revenue, but the sports lottery still has the potential to make a better showing, an analyst told CNA Friday.
Taiwan Sport Lottery Corp. (TSLC) under Taipei Fubon Bank, the sole company authorized to operate the lottery, asked for permission Feb. 8 to cut by half the revenue it is contracted to give the government, attributing lower-than-expected sales to a delay in launching the lottery, a change made to regulations governing its issuance, and the global financial crisis.
"Under the current regulations, the sports lottery is doomed to be non-profitable for operators, " said Griffey Chang, a sports lottery analyst who breaks down game odds daily for betters.
"It's not that there's no market for sports betting in Taiwan. On the contrary, there has been a huge underground betting market for years," he said.
The second and the most important factor of all, he said, is that the government asked the company to submit annual revenue by a fixed-rate portion of "expected sales" rather than "actual sales." According to that contract, which authorized Taiwan Sport Lottery to run the lottery from 2008 to 2013, Taipei Fubon Bank is required to give the government NT$20.83 billion over six years, or an average of NT$3.47 billion a year.
The bank had expected a sales revenue of NT$33.65 billion from 2008 to 2009 but the actual sales reached only NT$19.1 billion -- 56.8 percent of expected sales.
The large amount of promised revenue forced the bank to add it as an operating cost and bookmakers to lower the game odds, making the lottery unappealing for consumers, who ended up betting with underground operators, he went on.
Chang estimated that there are hundreds of thousands of sports betters in Taiwan and many of them are students because "they play sports, watch games and there is peer influence." There is also a technical problem that has affected sales, Chang said.
Sports betters are not allowed to bet on single games over the fear of game-fixing. For example, local professional baseball games are bundled with U.S. Major League (MLB) games, which means betters will have to correctly predict the outcomes of several local and MLB games to receive a return.
"The design discourages betters who don't follow foreign sports or do not read English, " Chang observed.
However, the creation of the sports lottery has turned more people into sports fans, he continued.
Over time, the lottery will have a positive impact on local sports by bringing in more fans as well as helping the sports federation with revenue, he said. Under the regulations, the government must allocate 90 percent of the revenue it receives from the sports lottery to sports development.
"The sports lottery business involves the livelihoods of many people, including more than 1,000 betting stations and disadvantaged groups. I do not think the government and the TSLC will let it fail," he said.