Here are some awesome statistics that few people realize when they think about China. We all know there are more than 1.3 billion people in China. But few realize that as of May 2012, according to mobithinking.com, China surpassed the 1 billion mark in mobile subscribers, the 400 million mark in mobile Internet users, and the 150 million mark for 3G phone users. There are over 513 million broadband Internet users, accounting for only 38% of the population. By comparison, the U.S. has only 245 million Internet users, with a penetration rate of nearly 78%. There are over 140,000 Internet cafes/bars in China, with a total of over 14 million computers each logging over 11 hours of continuous usage per day, and the majority of the revenue from all these Internet cafes comes from Internet gaming. On average, China’s Internet users spend 18.3 hours per week on Internet access, or 2.6 hours per day, according to China Internet Watch.

While gambling is still strictly prohibited on Mainland China (except for SAR Macau), according to the Center for China Lottery Studies in Beijing, in 2010 nearly $15 billion in underground gambling passed through the hands of avid gamblers, and roughly half of that involved using the Internet or mobile devices in one form or another. This speaks volume about the future of legal and regulated online gambling in China, as the demand is there and the potential for a successful launch is every online operator’s dream. This dream, however, has to be tempered with the fact that changes in regulations to allow for online gaming in China will not happen overnight and everything in China is a step-by-step approach. However, this does not chill the prospect that nearly half a billion eager Internet users can someday access an online platform to satisfy their gaming appetite, as not every Chinese Mainlander can make the trek to Macau regularly. The potential is limitless.

With the anticipated changing of the guards at the end of this year in senior Chinese government positions, including the Presidency, industry observers should expect to see shortly after the new administration is settled in place some loosening of rules governing high stakes lotteries, play for tokens, horse racing and various forms of bingo. Most would agree that the current games legally available in China fall short of gambling, but they are nevertheless still wildly successful. This is just the tip of the iceberg in terms of the gamingmarket potential in China. While the Central Government in Beijing (Ministry of Finance) is cognizant of what gaming revenues can bring, it is not quite ready to open the doors to online gaming or even landbased casinos on the Mainland – at least not yet. But that day will come.In the interim, gaming operators should position themselves (somealready have) by participating in various forms of high stakes online lottery with a local partner as a precursor to full-fledged gambling.

This is the “Chinese way” of testing the integrity of the foreign party’s online systems and their commitment to this sector. All industry observers will agree that when online gambling licenses are granted, the successful candidate will emerge from the current roster of participants of online lotteries with a proven platform and wellconnected local partners. Those with ambitions to cash in on the world’s largest gambling market must begin by building a record of trust and integrity with the Chinese government now – as it is not a matter of if, but when, the market will open to operators. Those that wait until the public announcement will find it will be too little and too late. China rewards early birds.