Jackpot!

A winning ticket that gave a lottery buyer 41.7 million yuan in Henan province in August 2007.

Li Zhenjie became an overnight sensation last November. The media hounded the sales agent for the China Welfare Lottery after it was revealed that a lucky individual who bought a 40 yuan lottery ticket from her counter had struck it rich.

The buyer made more than 100 million yuan, a record in China's lottery history.

Journalists across the country swarmed to Li's counter in Jiayuguan city, Gansu province, prodding her for clues as to who the lucky winner might be. The local bureau of the Ministry of Civil Affairs, which issued the China Social Welfare Lottery, awarded Li 3,000 yuan and proclaimed her a "hero" for promoting lottery sales.

This was unimaginable two decades ago when lottery and gambling of any kind was officially taboo in China. The winner, whose identity has never been disclosed for security reasons, would have been branded as a capitalist who made "unearned income".

Lotteries in China can be traced back to the 1880s. But after the founding of the People's Republic of China in 1949, the new government banned gambling as a vice related to feudalism and capitalism.

It was not until the country embraced the reforms and opening-up policy that the government started rethinking lotteries.

In 1984, Cui Naifu, minister of civil affairs, while meeting an overseas Chinese, mentioned the difficulties he was facing in financing the country's cash-strapped welfare system. Cui was given three suggestions: organizing horse races, taxing banquets and lotteries.

The idea of reintroducing lotteries interested Cui the most and he launched a feasibility study. Although at that time the country had already thrown its doors open to Western practices and new ideas, lotteries remained a sensitive topic. Any form of gambling could meet with stiff resistance from conservative government officials and even the public.

But the financial difficulties in pushing the country's fledgling social welfare undertaking forced top decision-makers to give the nod. In 1985, China had only 400 million yuan for social welfare while there were 150 million people who needed financial relief.

On December 20, 1986, the State Council "basically" approved a plan proposed by the Ministry of Civil Affairs to introduce lotteries. To counter possible opposition from the public, the Cabinet stipulated that the money raised be used only for social welfare.

In July 1987, Cui suggested Hebei and Zhejiang provinces, and Shanghai and Tianjin municipalities issue lotteries as part of a nationwide pilot project.

Shijiazhuang, capital of Hebei, took the initiative by issuing the first lottery tickets in the country since 1949 on July 26, 1987.

The debate

Debate over lotteries still persisted. To overcome the resistance, Tang Minze, chief of Hebei Welfare Lottery Center, came up with a slogan to advertise ticket sales, but it was opposed by many.

"Sincere wishes to win the top awards," it read. Some thought it could be misleading as it encouraged people to participate in lotteries to win instead of contributing to society, Tang recalls in an interview with People's Pictorial. At that time, making contributions to society was equated with selfless service.

The debate was so intense that the ad line had to be cleared by the central government. Once the go-ahead came through, 3,500 posters publicizing the lottery blanketed Shijiazhuang.

On July 27, 1987, lottery sales started and vice-mayor Sun Yongsheng, who was among a number of government officials to campaign for the lottery, bought the country's first 10 lottery tickets from Tang.

Unlike elsewhere in the world, in China lottery was linked to a patriotic spirit and the event was hyped as a charity fundraiser rather than a chance to get rich quick.

Sales pushed by patriotism weren't brisk. On the first day 58 counters in Shijiazhuang sold tickets worth only 1,246 yuan and most were bought by government officials although the local authorities planned to issue a total of 80 million tickets.

Wen Guobin, a peasant in Shijiazhuang, got 2,000 yuan, the first top award in China's first lottery. The win enabled Wen to have a decent wedding. He bought four tickets and the lucky number was 046806, according to Hebei Youth Daily.

Sales boom

The Shijiazhuang lottery was followed by sales in nine other provinces and cities. In 1987, the total sales in the country reached only 17.4 million yuan.

Lottery organizers started adopting "innovative" approaches to boost sales. And increasingly it looked more like a lucky draw than an exercise in patriotism.

A typical scene used to be a truck packed with motorcycles, color TV sets, washing machines and even shampoo in a city square or a bazaar in the countryside. Typically there would be singing and dancing shows before the results of the lucky draws were announced. The winners would then step up to claim their prizes, encouraging others to buy more.

In 1988, the State Council approved a lottery designed to raise funds for the 11th Asian Games held in Beijing in 1990. That marked a departure from the Cabinet's initial intention that all proceeds would be used for social welfare. But since then, lotteries in numerous forms have been approved to finance sports events in the country.

In 1989, lottery sales in China hit 380 million yuan and have skyrocketed since as lotteries began to lose the sense of guilt associated with them and the government became increasingly aggressive in pushing sales.

Prizes were gradually replaced by cash awards and public lucky draws were replaced by computerized lotteries. From 1985 to 1999, China sold lotteries worth more than 50 billion yuan.

Gaming rules

A lottery craze swept the country. On January 9, 1999, when a new lottery was issued in Wenzhou, a city in Zhejiang province, sales hit 120 million yuan in a single day.

In October 2001, a football lottery, targeting the World Cup, was launched across the country, with the top prize reaching 5 million yuan. By the end of that year, in Guangdong province alone, the lottery produced 31 millionaires.

Despite booming sales, China's lottery market has lacked regulatoins. The government has relied solely on temporary administrative tools, which critics say has resulted in frauds and malpractices. Lotteries organized by unauthorized organizations have been rampant as well.

On July 27, 2007 at a ceremony celebrating the 20th anniversary of the country's first lottery, Vice-Minister of Civil Affairs Li Liguo said the country recorded 242.3 billion yuan in total sales of lottery tickets by July.

Last year the country sold lottery tickets worth more than 100 billion yuan, with 62 billion yuan of welfare lottery tickets and 38 billion yuan of sports lottery tickets.

But illegal lottery sales could be "10 times" that amount, said Wang Xuehong, executive director of China Center for Lottery Studies at Peking University during a CCTV talk in January.

Irregularities have been rife even in legal lottery sales. In March 2004, migrant worker Liu Liang became the lucky winner of a scratch-to-win sports lottery in Xi'an, capital of Shaanxi province. But he was denied the prize when he went to get his award, a BMW car and 120,000 yuan in cash. The seller claimed Liu was holding a fake lottery ticket.

Extensive media coverage of the incident led to an investigation that found that a lottery ticket contractor had won top prizes by marking the tickets and employing people to falsely claim the winnings.

Liu was found to be the real winner and finally received the prize and several people were sentenced to jail, including the head of the local sports lottery center for dereliction of duty. After that the government discontinued the scratch lotteries.

The high-profile scandal led to increasing calls for lawmakers to introduce regulations for lottery supervision.

However, China only has a provisional regulation for the management of lottery distributions and sales, issued by the Ministry of Finance in 2002. Some observers are betting on the law to break the monopoly of the China Welfare Lottery Administrative Center and the sports lottery administrative center of the China General Administration of Sport, the only two legitimate lottery issuers in China.

The law is expected to be introduced next year at the earliest.

However, one of the biggest hurdles thwarting China's lottery market is the so-called hate-the-rich mentality. The increasing prize amounts have drawn more buyers but it has also brought trouble to the top winners in a country where the gap between the rich and the poor is widening. The security of winners is always an issue.

Most winners claim their prizes with their faces covered and sometimes accompanied by bodyguards.

One exception is a lottery buyer in Wenzhou who gave his surname as Lin. Lin claimed 51 million yuan in prizes in June himself without covering his face but otherwise stayed away from media spotlight.

Large crowds swarm to a square near Changsha Railway Station in Hunan province to buy scratch-to-win lottery tickets in 2004.

(China Daily 07/28/2008 page2)