Few companies in China can afford to be associated with corruption these days, as President Xi Jinping’s sweeping anti-graft campaign hit domestic and foreign firms alike. Casualties at China’s state-owned enterprises are high- Dozens of executives have been taken down at the China National Petroleum Corp alone, not to mention others that have committed suicide amid the unrelenting cleanse. Among foreign firms, British drug makerGlaxoSmithKline appears to be one of the hardest hit. It was fined $489 million in September for bribing doctors.

It is no surprise that, in this environment, rumors of corruption can drive a company down. The latest example is Shenzhen-based sports-lottery firm 500.com. Shares of the New York-listed company were down 9.76% to $10.63 on Monday. They rebounded a bit to $10.79 on Tuesday. The cause is one tweet alleging “major corruption going on here” from Adam Gefvert, head analyst at White Diamond Research. 500.com spokesperson Daniel Yan said by phone yesterday the tweet is a short seller spreading groundless rumor.

Yet 500.com continues to face high regulatory risks. Recent filings showed that provincial sports lottery administration centers “temporarily” suspended sales to the company, after the government in Beijing ordered in January a halt of online sports lottery selling due to reports of potential illegal activities. The firm earns part of its revenues- which stood at $93.4 million last year- from commissions paid by the provincial centers. The suspension triggered a number of class-action lawsuits for failing to disclose regulatory risks.

500.com is not the only one affected. More than 30 companies-including Alibaba Group Holding,Baidu and Tencent Holdings - have suspended their online sports-lottery sales. Li Chao, an industry analyst at consultancy iResearch, told the semi-official Global Times that the suspension gave authorities time to hand out proper licenses for selling lotteries online, a market that grew by 102% to 85 billion yuan last year. But it is uncertain how that will affect 500.com. The Ministry of Finance has already authorized it to sell lotteries online. As Timothy Ghriskey, chief investment officer at New York-based Solaris Asset Management pointed out, Beijing could make radical changes “that could either hurt or help this company.”