Unauthorized online lotteries banned

There is speculation that the government may consider setting up a separate government agency or a regulatory body to supervise the lottery sector.

The sector is currently jointly regulated by three government departments: the Ministry of Finance, the Ministry of Civil Affairs and the General Administration of Sport.

But the wording of the statement shows the government's attitude toward the Internet lottery sector remains cautious, Su said.

"The opening up of the industry will only be very limited and there won't be a complete market relaxation," he said.

Analysts said that as Friday's statement also involved the Ministry of Public Securities, the People's Bank of China and the China Banking Regulatory Commission, it highlighted the government also intended to target the criminal activities and finanicial irregularities involved in online lottery sales.

The lottery industry is also awaiting the result of an overall audit launched by the central government into local lottery centers in 18 provinces.

The audit caught the industry by surprise and it may uncover serious problems and corruption by lottery officials involving illegal management of the lottery fund, industry experts said. While it is unclear when online lottery businesses will be allowed to resume, most Internet companies remain positive about the business prospects.

Analysts said the impact of the suspension will be limited on the e-commerce industry as a whole, as online lotteries actually contribute a very insignificant portion of the revenues of major Internet companies such as Alibaba Group Holding Ltd and Tencent Holdings Ltd.