19 October 2007
Australian Securities Exchange
Company Announcements Platform
Dear Sir/Madam
Re: Shanghai Kelo works closely with SSLA in successful launch of new gaming products Sino Strategic International Ltd (“SSI”) is pleased to advise that its wholly owned subsidiary, Shanghai Kelo Investment Management Company Ltd (“Shanghai Kelo”) hosted the official launch of new gaming products for Shanghai Sports Lottery Administration (“SSLA”) on 18 October 2007 at its Multi-function Entertainment Centre at Hong Kou, Shanghai.
SSLA launched their new high frequency game, “5 out of 22”, successfully on 18 October 2007 through 200 distribution outlets in Shanghai. Of the 200 outlets, 93 are Shanghai Kelo existing gaming distribution Points of Sales (“POS”). By the end of October, 2007, Shanghai Kelo expects to have 200 of its existing outlets equipped with SSLA terminals to retail the “5 out of 22” high frequency game as well as SSLA’s traditional Sports Lotto products.
As the additional products from SSLA are marketed within Shanghai Kelo’s existing POS network, they can be expected to increase Shanghai Kelo’s turnover significantly over time without much increase in operating overheads. Currently, Shanghai Kelo enjoys 75% market share in Welfare Keno sales in Shanghai. It is expected that its share of the SSLA “5 out of 22” high frequency game turnover in Shanghai will exceed 50% in the short term.
The new “5 out of 22” game offers a top prize of RMB 25,000 and is played every 10 minutes between the hours of 9am and 10pm with 78 games played each day. Initial acceptance of the game was highly encouraging and players remarked at the ease to play the game and the improved odds of winning prize money. The new high frequency game from SSLA is retailed along side the Shanghai Welfare Lottery’s Welfare Keno game in which players select 10 out of 80 numbers with a top prize of RMB 200,000.
Shanghai Kelo has developed a close working relationship with SSLA culminating in the signing of a formal agreement in late September 2007. Shanghai Kelo has played an important role in the successful launch of the new SSLA high frequency game and on behalf of SSLA, was responsible for the development of the software for user interface and display design of the game.
The close working relationship between Shanghai Kelo and SSLA bodes well for the continuing participation of Shanghai Kelo in the launch of any additional new games by SSLA, and in particular, sports betting, within the existing Shanghai Kelo POS network.
It is expected that sports betting will be legalized nationwide as from the beginning of 2008 with Shanghai joining the nationwide launch at the same time. Beijing, Shanghai, Dalian, and Guangzhou are regarded as the four Soccer Cities of China.
Sports betting in China turns over significant amounts of money each year, estimated by industry sources to be US$10 billion a month, with most of that being illegal activities. The government has started to crack down hard on such illegal activities and since January 2007 has been trialing legalized forms of sports betting in three provinces, in Beijing, Tianjin, and Guangdong, prior to national legalization.
Below photograph was taken at the official launch of SSLA’s new high frequency game at Hong Kou, one of Shanghai Kelo’s POS in Shanghai, showing the enthusiasm of players with the new game.
Below pictures illustrate the display graphics of the “5 out of 2” game designed by the Shanghai Kelo team.
Yours sincerely
Richard Li
Chief Operating Officer, Australia and
Director, Group Corporate Strategy
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Gruß
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