Since 1987, the Welfare Lottery is authorized by the State Council to issue lottery tickets.
From 1994 to present, the Sports Lottery has also issued lottery tickets under the authorization of the State Council. These two lotteries represent the only forms of legal gambling in China, even though some exceptions have been made by the country's finance ministry, which regulates, supervises, and administers the national lottery.
According to China's laws, poker, chess, and other entertaining games are not considered gambling. Sports betting is allowed, if authorized by China's government. Otherwise, sports betting is considered illegal and prohibited.
The Sports and Welfare lotteries are the only legal land-based lotteries permitted in China. However, government regulators may authorize entities to distribute lotteries by securing an agreement with the government. These authorized distributors must meet certain requirements, such as having a venue for lottery sales and enough capital to conduct lottery ticket sales. Requirements may vary between regions.
The Sports and Welfare Lotteries in China are immensely popular. Available to players 18 and older, results air immediately following the drawings, which occur in Shanghai. Lottery ticket holders tune in multiple times each week to check the winning lottery ticket numbers.
Lotto launched with the following format. After more than a decade in operation, the game's format hasn't changed. With multiple drawings a week, the lottery offers its ticket holders prizes in six categories. The jackpot begins at €500,000 (¥3.61 Million). The minimal cost of participating in the game draw gives players a chance to win one of the jackpot prizes for a small investment.
Fortunately, there is a 1 in 3 chance to win a prize, but the 1 in 79,453,500 jackpot odds are not as favorable. The odds don't deter Chinese residents from playing in hopes of winning large sums of money. One factor drawing players is that China's lottery winnings are remitted in a lump sum payment.
Winners must visit the lottery administrative headquarters in Shanghai to claim winnings above $468. All winners must pay a sum equaling 20 percent of the winnings toward taxes. After 60 days, winning tickets are no longer valid.