500.com has entered a deal to acquire 169 million shares of Loto Interactive, a Hong-Kong-based lottery services provider, for $13.5 million.
From 33.7% to 54.2% Stake
Chinese top online lottery provider 500.com will acquire about 169 million shares of Loto Interactive, boosting its current 33.7% stake in the Hong-Kong-based lottery services company to about 54.2%.
Through the deal, valued at $13.5 million (HK$105 million)and to be paid in cash, Loto Interactive will become one of 500.com’s subsidiaries. The group provides data analysis and technology systems for iGaming, in addition to holding services.
It also offers cryptocurrency mining management, a sector 500.com recently entered with the acquisition of $14.4 million worth of Bitcoin mining machines from two anonymous US sellers in mid-January, following the appointment of its new Chief Executive Officer, Xianfeng Yang, at the beginning of the month. Yang previously operated at Loto Interactive’s three giant data centers.
Bitcoin Mining Machines to Be Deployed in Q1
500.com’s Bitcoin deal is expected to be completed in Q1 this year, with the mining machines planned to be deployed in less than four weeks, 500.com said. The company aims to start generating revenue in the first six months of 2021.
This deal doesn’t come at a small price in terms of environmental impact, with a the necessary hash power to run the machines estimated at 918.5 quadrillion hashes per second.
Loto Interactive also entered a deal to acquire its remaining interests in Ganzi Changhe Hydropower Consumption Service, an indirectly held subsidiary, for about $13.7 million (CNY88.2 million). The group currently holds 51% of the equity interests in Ganzi Changhe, set to reach 100% once the transaction is completed.