Lottery is authorized and issued by the state, and sold to and purchased by players voluntarily, for the purpose of raising public welfare funds for society and facilitating the development of social community initiatives, with the lottery ticket as a proof to winning under certain regulations. Lottery does not return the principal to players or bear interest. The issuance, sales and drawing of lottery should follow the principles of Open, Fair, Just, Honest and Credible.

There are two kinds of lottery tickets issued in China: (1) China Welfare Lottery, issued by China Welfare Lottery Distribution Center in 1987; (2) China Sports Lottery, issued by China Sports Lottery Administration Center in 1995.

The Welfare Lottery and the Sports Lottery have five main product categories: lotto type lottery game product that are either traditional in nature with a daily or weekly draw pattern as well as modern high frequency games featuring multiple draws per hour (“Lotto”), sports betting (“Sports”), video lottery terminal (“VLT”), keno product (“Keno”) and instant scratch cards (“Scratch”).

Market Scale

In 2018, with the exception of Scratch and Keno, the other lottery products enjoyed year on year sales growth, with Sports as the stand-out product growing strikingly 88.6% over 2017 due to 2018 World Cup. The Scratch declined 8.5%, continuing several years of decline. Overall, Lotto remains by far the largest category, representing 53.9% of the overall market, followed by Sports, VLT, Scratch and Keno.

PRC annual lottery sales in 2018 set a new record high of RMB511.4 billion, a 19.9% increase over 2017. Welfare Lottery and Sports Lottery grew 3.5% and 18.9%, representing 44.2% and 55.8% of the total market respectively.

Regulatory Framework

The State Council is vested with the power to authorise the issuance of sports lottery and welfare lottery, and is also the highest authority to grant the rights to issue lotteries. The Ministry of Finance is responsible for administering, regulating and supervising the national lottery industry. The General Administration of Sports of China and the Ministry of Civil Affairs, both reporting to the Ministry of Finance, are responsible for administering and regulating sports lottery and welfare lottery respectively, and have established SLAC and the China Welfare Lottery Issuing Centre respectively pursuant to regulations for issuance of and organizing the sales efforts of sports lottery and welfare lottery.