China Sees Downturn In Lottery Sales

After a two-month growth run, China’s lottery sales experienced a slowdown in September, a pattern that is likely to continue following new regulations limiting ‘high-frequency’ lottery goods.

Chinese Ministry of Finance figures published Friday show total lottery revenues of RMB35.8b (US$ 5.35b) in the month of September, a 1.5 percent decrease from the same month last year. The downturn brought the moderate growth streak of the market to an end over the past two months, which followed 18 months of annual declines.

The decline in September was entirely due to welfare lottery sales dropping 11 percent to RMB13.9b, while sports lottery sales rose 5.8 percent to RMB21.9b following their pandemic halt due to the resumption of global sports leagues.

Overall revenues have decreased 27 percent to RMB230.7b for the year to date, with welfare lottery falling 28.8 percent to RMB101.9b and sports lottery falling 25.4 percent to RMB128.8b.

October sales may reverse September’s slide, but after that, things are likely to trend sharply downward. Beijing instructed provincial lottery administrators last week to conduct a “orderly delisting” of lottery items “high-frequency” (sports) and “quick-opening” (welfare), the active promotion of which was stopped almost two years ago.

Lottery administrators must pare down their instant offering to one welfare and one sports product beginning on November 1, while all short-duration products will be off-limits after the public holiday of the Spring Festival next year.

The reforms would force some tinkering with the formulas for returning winnings to players, according to state-run media, including a drop in payouts from 71 percent to 70 percent. But Beijing is also enforcing new restrictions on the willingness of players to buy lottery goods and the capacity of retailers to sell them.

From now on, from 9 am to 11 am, the opening hour for lottery purchases is being moved back two hours. On single-day sales, lottery terminals would also be subject to an undefined limit.

The daily limit will be lowered from RMB9,999 to RMB6,000 ($900) on any player’s single lottery wager. If the one-day transactions of any player exceed RMB10k, that player will be required to complete a form listing their name and other identifying details.

The authorities are hopeful that the new rules will not only prevent wasteful spending, but will ensure that with greater independence and flexibility, both players and retailers “have more rest time and other free time at their disposal, with greater freedom and flexibility.”

This month also saw the debut of the first official mascot of the Sports Lottery, Le Xiaoxing, which followed a competition in which Chinese artists were invited to submit their own designs.

The chosen design appears to contrast sharply with the efforts of China to decrease gambling participation, particularly given the kid-friendly cartoon nature of the mascot. Other, even more accepting gambling markets have been doing what they can to reduce the attraction of gambling to kids by removing child-friendly imagery.