China-facing lottery solutions provider 500.com has announced that its The Multi Group (TMG) subsidiary has temporarily suspended operations in Sweden after failing to renew its licence.
Malta-based TMG had been operating its MultiLotto lottery betting brand in Sweden under a year-long licence, but did not renew the permit before its expiration.
However, 500.com said TMG is in close communication with Spelinspektionen, the national gambling regulator in Sweden, with a view to renewing its licence as soon as possible.
TMG said it expects to renew its licence and resume operations in the country by mid-February.
500.com expects TMG's contribution to group revenue during the first quarter of 2020 to be both materially and adversely impacted by the suspension of operations in Sweden.
TMG revenue accounted for approximately 99.1% of 500.com’s total net revenue for the third quarter of 2019, of which around 61.3% was generated in Sweden. The business was acquired in a €49.8m deal in May 2017. In November 2019, 500.com reported a 67.6% year-on-year decline in third quarter revenue, blaming the decline in part on issues related to the migration to a new website in Sweden.
The suspension will comes after 500.com last week revealed that its chief executive had stood aside over accusations of bribery in Japan.
500.com said that Zhengming Pan, its director and chief executive, requested to temporarily step away from his positions until the conclusion of an internal investigation into alleged illegal money transfers related to the development of integrated resorts in Japan.
500.com has formed a special investigation committee to consider its conduct in Japan and the role played by consultants following the arrest of one consultant, who was also a former director of the company's subsidiary in Japan, and two former consultants by the Tokyo District Public Prosecutors Office.