Huafu Securities: The World Cup of Sports Lottery Catalyzes Betting Sales, Paying Attention to Store Operations Targets.

Huafu Securities released a research report stating that historically, major sports events such as the World Cup and European Championship have a significant impact on monthly sales of sports lottery. In the 2026 World Cup in the United States, Canada, and Mexico, 48 teams will participate for the first time, with the number of matches increasing to 104. The China Sports Lottery estimates that this World Cup may increase the customer flow and average transaction value of sports lottery stores by 3-5 times. Sports lottery store operating companies are expected to benefit directly, and it is recommended to pay attention to China Guang Tianze (603721.SH) and China Sports Industry Group (600158.SH); the increase in World Cup matches and the inclusion of multiple teams for the first time may lead to discussions on topics like "underdog advancement", and it is suggested to pay attention to Guangdong Guangzhou Daily Media (002181.SZ). Key points from Huafu Securities: Continuous growth in the lottery industry, significant increase in competitive increment In 2025, the national lottery sales totaled 627.969 billion yuan, an increase of 0.7% year-on-year, with sports lottery sales of 419.39 billion yuan, accounting for 66.8%; welfare lottery sales of 208.58 billion yuan, accounting for 33.2%. In sports lottery sales, the sales of lottery/competitions/instant terminals were 77.95/277.746/63.692 billion yuan, accounting for 18.59%/66.23%/15.19%, with the growth of sports lottery mainly contributed by competitive and instant lottery. The sales of sports lottery during the World Cup cycle have significantly increased, with a significant pulse appearing for the first time in the 2014 World Cup cycle. The average sales of competitive lottery in February during the three World Cups in 2014/2018/2022 (97.58/275.97/370.38 billion yuan) increased by 182.9%/163.9%/205.7% compared to the average sales in the two months before the games. Industry chain: Strong regulation, companies focused on the middle and downstream segments The sports lottery is regulated by the financial department, and the various levels of sports lottery centers are responsible for issuing and selling. The industry chain is fully regulated by the state, covering upstream (lottery research and development), midstream (ticket printing, terminal equipment and sales systems), and downstream (sales and derivative services). The proportion of prize money returned in sports lottery sales is 51%-70%, in addition to public welfare funds and issuance fees. Companies in the industry chain are mainly focused on the middle and downstream segments, with revenue mainly coming from issuance fees. Risk warning World Cup sports lottery sales do not meet expectations, increased competition for sports lottery stores, and ongoing fund usage issues for China Sports Industry Group.