Record Sports Toto jackpot prize smashes RM100 million, igniting lottery frenzy in Malaysia

[KUALA LUMPUR] Share prices of Malaysian number forecast operator (NFO) Sports Toto, the largest in the country, have gained nearly 2 per cent this week, as punters are buying more lottery tickets in hopes of winning its Supreme 6/58 jackpot, which has exceeded RM100 million (S$30.3 million).

Sports Toto shares closed at RM1.54 per share on Friday (Jan 17), up from RM1.51 on Monday. Its peer Magnum’s share prices fell by 3 per cent this week, trading at RM1.30 on Friday.

The current Supreme jackpot prize stands at RM100.5 million, compared with RM68 million at the beginning of the year. The previous highest jackpot was RM97.7 million in 2022.

On Wednesday, the jackpot prize was RM93 million, and Sports Toto chief executive officer Nerine Tan expressed optimism that it would surpass RM100 million by the end of the week.

“We believe someone could win this week, as the number of people buying tickets has increased significantly in recent weeks,” she told the media after attending a Chinese New Year charity event on Thursday.

She said around three million tickets were sold for a single draw, making the anticipation even greater. Draws occur every Wednesday, Saturday and Sunday.

“Hopefully there will be someone winning the RM100 million – a huge (hongbao) before Chinese New Year; this could be life-changing for the whole family,” said Tan, who is the eldest daughter of Malaysian tycoon Vincent Tan.

Vincent Tan is the founder and chairman of Berjaya Corporation, which owns Sports Toto. He is also a substantial shareholder of telecommunications company U Mobile.

Impact on earnings

Analysts are generally optimistic about the recent surge in the Sports Toto jackpot prize.

Kenneth Leong, head of research at Apex Securities, anticipates Sports Toto’s earnings for the coming quarters will improve due to the influx of patrons attracted by the substantial prize payout.

“Recall that the previous RM97.7 million jackpot prize from Sports Toto, won on Mar 30, 2022, also drew large crowds,” he said.

He highlighted that Sports Toto’s revenue during the period from January to March 2022 surged by 54 per cent year on year to nearly RM1.8 billion, while net profit skyrocketed by 326 per cent year on year to RM79.5 million.

For the first quarter ended Sep 30, 2024, Sports Toto’s net profit fell by 31 per cent year on year to RM41.3 million, while revenue slipped 9.5 per cent year on year to RM1.4 billion.

Sports Toto is Malaysia’s largest NFO by outlet numbers, operating around 680 outlets across the country, while its competitors include Magnum with 485 outlets, and Damacai (operated by Pan Malaysia Pools), which has around 300 outlets.

While concurring with Leong’s perspective, Ng Zhu Hann, CEO of Tradeview Capital, considers the recent surge in demand a seasonal spike due to the Chinese New Year, as many are “betting on hopes”.

Challenges

Ng pointed out that NFOs in Malaysia face several challenges, including restrictions on expansion in states governed by the Malaysian Islamic Party (PAS).

Additionally, they contend with competition from illegal online gambling operators that have proliferated since the Covid-19 pandemic, leading many to continue betting online rather than through legal NFOs.

“This situation is reflected in their stagnant share prices. However, we have observed some improvement in Sports Toto’s stock price due to positive developments regarding U Mobile, in which Sports Toto holds a minority stake,” he noted.

Ng mentioned that there are market discussions about U Mobile potentially going public within the next two years, which could enhance Sports Toto’s share price if realised.

U Mobile has been awarded a licence to deploy Malaysia’s second 5G network, representing a significant shift towards a dual-network model and increasing competition in the telecommunications sector.