Sat, July 13

Young People and the Welfare Lottery Craze in China: A New Generation’s Gamble on Fortune

Have you ever bought a lottery ticket, and what’s the biggest prize you’ve won? Recently, the lottery has caught fire again. A lottery player from Jiangxi entered two different lottery stores and spent 100,000 yuan to buy 50,000 tickets with the same set of numbers, miraculously winning a 220 million yuan jackpot tax-free. Netizens joked about this being an overt act of clearing out the prize pool at the end of the year, while others speculated it to be a PR article from the lottery station. A concerning trend is the shaking of the value of hard work for wealth, as more and more people pin their hopes of wealth on lottery tickets. From January to September this year, national lottery sales exceeded 420 billion yuan, a year-on-year increase of 52.4%. Following this trend, the total lottery sales for 2023 are expected to reach 580 billion yuan, surpassing the highest historical sales record set in 2018. While some criticize the system as rigged, others feverishly buy tickets. What’s going on with lottery players today? Is winning the first prize in the lottery pre-determined?

It’s important to clarify that the lottery was never designed to make you rich overnight. With no money for public welfare, the idea was for everyone to chip in, set up some prizes, and use the excess after deducting costs and prizes for charity. Sounds reasonable, right? On July 27, 1987, the first batch of China Social Welfare Prize-Granting Lottery Tickets was released, valued at one yuan each, with a total of 80 million tickets issued in ten provinces including Hebei, Jiangsu, Zhejiang, Shandong, etc. The very first Chinese lottery ticket was sold in Shijiazhuang, Hebei. The grand prize was one thousand yuan, which seems meagre compared to today’s billions, but back then, an average worker’s annual salary was just over 1000 yuan, and farmers earned around three to four hundred yuan a year. Winning a big prize could mean living comfortably for several years, making the gamble highly enticing. All 80 million tickets were sold out, with profits used for public welfare.

China’s first lottery public welfare fund was allocated to the Henan Dei Blind People’s Massage School. To encourage lottery purchases, the prizes were continuously upgraded, with the amount of major prizes increasing and items like refrigerators, air conditioners, washing machines, bicycles, motorcycles, and cars added to the prize pool. Subsequently, different types of lottery games were developed, such as scratch cards, Double Color Ball, Welfare Lottery Seven Star, etc., with the number of lottery players in China reaching over 300 million, meaning one in every four people buys lottery tickets. However, as lottery sales have grown, so has its notoriety. Why? The core issues lie in the rules and lottery drawing incidents.

Let’s discuss the rules that have been most criticized: first, lottery tickets stop selling at eight o’clock, but the drawing isn’t until after nine, leaving over an hour’s gap, the purpose of which is unclear. Second, the drawing is recorded, not live, raising suspicions despite official assurances of notary presence. Lastly, the method of claiming prizes is secretive, with most jackpot winners completely disguised, making it impossible to know who won. There’s little to no follow-up on winners, unlike in the U.S., where there are reports on lottery winners’ fates, such as dying from hiring prostitutes on the day they won or committing suicide after squandering their winnings. In contrast, winners of super jackpots in Chinese lotteries sometimes disappear after claiming hundreds of millions, sparking plans among netizens to openly claim prizes, live stream their experiences, and potentially earn more from broadcasting than the prize itself, effectively debunking lottery scam rumours.

Another point of criticism is the frequent incidents during lottery draws, meaning there are often mishaps during the drawing process, but the official explanations seem reasonable. The earliest known lottery incident occurred in 2004 when a young man named Liu Liang in Xi’an bought a ticket at a crowded lottery point, winning the grand prize of a BMW and 120,000 yuan in cash. However, before he could claim his prize, he received a call from the Shaanxi Provincial Sports Lottery Center declaring his win invalid due to the ticket being counterfeit, involving criminal responsibility. This incident escalated until it attracted national media attention. The director of the Shaanxi Provincial Sports Lottery Center assured the public of their integrity, but investigations revealed that among the four winners, besides Liu Liang, the others were shills, and the mistaken award was due to a contractor accidentally mixing a real grand prize into a non-prize envelope. The fraudulent contractor and related lottery centre staff were held accountable, and Liu Liang eventually received his prize. Shortly after, instant sports lottery tickets were suspended in mid-May of that year.

There were more outrageous incidents, such as the drawing of the Fujian Sports Lottery 31 Pick 7, where the fourth ball, number 01, seemed to stick to the slope, causing subsequent balls to also stick, raising suspicions especially when the notary had the number 01 card prepared in advance despite the ball not yet settling. The incident was explained as possibly due to weather conditions but assured you the drawing was fair and the results valid. Amid growing scepticism, a nationwide investigation into the authenticity and corruption of the lottery was launched, uncovering significant misuse of lottery funds, including billions used for illegal purposes like purchasing and repairing official vehicles, illegal bonuses, overseas trips, building new offices, and buying financial products. In 2018, a systemic corruption case involving the Welfare Lottery was exposed, involving senior officials and resulting in a debunked rumour of corruption amounting to 136 billion yuan, though the exact figure was not disclosed.

The question of whether eliminating these manipulations would improve the odds of winning big is complex; for example, the odds of winning the Super Lotto are incredibly slim at 1 in 17,720,000. Some suggest buying all possible combinations to ensure a win, a tactic once employed by Taobao during a shopping festival, which did not turn profitable but was a significant event for lottery players.

By 2015, due to illegal gambling and other issues, online lottery sales were suspended, and purchases had to be made at offline stores. Despite this, lottery sales, especially in 2023, have surged unprecedentedly, reflecting a shift in the demographic of lottery buyers, now including many younger people. This reflects two types of lottery players: those seeking a chance at wealth and those buying for fun, highlighting the increased pressure of economic downturns and job anxieties among the youth. The majority of lottery buyers are from lower to middle-income groups who are aware of the slim chances but are drawn to the “what if” possibility, considering it a form of charity if they don’t win.

However, the booming sales of lottery tickets are not a positive signal as they do not generate societal wealth but merely redistribute existing wealth. The economic improvement requires investing in real industry and innovation. Data shows a stark contrast between state-owned and private-sector investments, underscoring the significant contribution of private enterprises to China’s GDP and tax revenue. From another perspective, as long as people find joy and participate in legal, charitable acts through lottery purchases, it suggests societal stability. The real concern would arise if people lost interest in buying lottery tickets altogether, indicating deeper issues.