500.com Inc CEO Man San Law celebrates his company's IPO on the floor of the New York Stock Exchange, Nov 22,2013.The company saw its share price drop nearly 5 percent after it reported on Monday a profit surge of 436 percent year-on-year in the second quarter. Reuters

The United States-listed 500.com Ltd, an online sports lottery service provider in China, saw its share price drop nearly 5 percent after it reported on Monday a profit surge of 436 percent year-on-year in the second quarter, mainly boosted by the 2014 FIFA World Cup fever.

Despite the fact that 500.com's performance beat analysts' expectations, concern remained that the Shenzhen-based company may lose its charm among football fans after the once-every-four-years event.

However, analysts pointed out that China's online lottery market is still largely untapped.

Online lottery firms can score big if they can make the best of mobile channels and win the hearts and wallets of China's rapidly growing numbers of mobile Internet users.

500.com said its net revenue jumped 185.4 percent year-on-year to 156.1 million yuan ($25.2 million) in the second quarter, while total sales between April and June were up 199.1 percent from the same period last year to 2.09 billion yuan ($337.4 million).

"Our growth momentum continued with revenue increasing significantly during the quarter as a result of the 2014 FIFA World Cup," said Man San Law, founder, chairman and chief executive officer of 500.com, adding that total sales for the quarter were a record for the company.

Despite the solid performance, maintaining rapid growth seems a challenge for 500.com.

According to the company's financial report, it saw active new users surge 193.1 percent from 737,000 in the first quarter to 1.26 million in the second quarter.

Active new users accounted for nearly 59 percent of the company's entire lottery sales figures in the second quarter.

"A lot of people who weren't football fans were gambling on every match during the World Cup, because part of the novelty was that there was only one game at a time, and it was easy to watch with frien

"But with the coming domestic football season in the third quarter, I think the interest in gambling will dwindle because most of the games are played at the same time, and they are only usually on a Saturday or Sunday evening in China," Flynn said.

Li Zichuan, an analyst with Beijing-based Internet consultancy Analysys International, said that it is natural that online lottery firms should lose some users after the World Cup, because major games are always an effective catalyst for heating up the lottery market.

"But those who bet on seasonal games are usually not the hard-core users of online lottery firms," said Li, noting that the online lottery market should expand in China, where it accounts for less than 20 percent of total lottery sales while in developed countries, online lotteries comprise more than 30 percent of overall lottery sales.

According to Analysys International, online lottery market sales in China were estimated to total 21.2 billion yuan in the second quarter, a jump of 44.9 percent from the previous quarter.

Li said there is enough room for both personal computer-based and mobile-based lottery service providers to grow. But the growth momentum of mobile lotteries, sold through smartphone applications, such as Tencent Holdings Ltd's mobile chatting app QQ and WeChat, is much faster than traditional lottery websites.

Data from Analysys International showed that 500.com ranked third among China's PC-based lottery market with 6.8 percent of market share in the second quarter, while ranking fifth in the mobile lottery market with an 8.6 percent sharein the second quarter, while ranking fifth in the mobile lottery market with an 8.6 percent share.

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