The worse is yet to come for the beleaguered Chinese online sports lottery operator 500.com Ltd. – if the rise of short sellers is any indication.

Bloomberg tracked a surge of bearish bets on 500.com Ltd days before the lottery operator announces its second-quarter earnings, an omen that things are getting worse in the company more than a year and a half since the Chinese government stopped its operations.

Data from Markit and Bloomberg showed that 500.com’s U.S-traded shares hit a record of 4.2 million sold short last week. Fueling the short-selling activities in the company is the speculation that the Chinese regulators left out 500.com from the list of lottery services allowed to resume operations.

In an e-mail to the business news agency, analyst Henry Guo of the New York-based M Science LLC said the Chinese government is mulling on issuing license to selective players in China.