Furore in China over alleged lottery corruption

China, lotteries and corruption were keywords that re-surfaced this week in press reports on the Chinese government’s efforts to address a social media storm based on allegations that some RMB136 billion (US$19.5 billion) has been embezzled by corrupt lottery administrators.

The issue will do little to persuade the government to lift its several year old “temporary” ban on online lottery action which has crippled several companies in the region (see previous reports).

The social media storm revolves around claims that it is almost impossible for ordinary lottery punters to win a major prize, allied to a recent state television broadcast of a video in which four former senior Welfare Lottery officials, led by disgraced former Welfare Lottery director Wang Suying, admitted there was systemic corruption in the sector.

Government efforts to calm the online storm have included a rejection of the amount alleged to have been stolen from the Welfare Lottery, which last year recorded sales of RMB 427 billion (see previous reports). However, the continued lack of transparency, illustrated by government declining to detail losses on grounds that it would be inconvenient, has reportedly further inflamed suspicions.

Publically available figures date back to 2012 and are contained in a National Audit Office report in 2015, which disclosed that corrupt lottery officials had stolen or misused almost RMB17 billion between January 2012 and October 2014.

Part of those losses were in the online sector, where administrators allegedly failed to officially report all online sales, pocketing the balance and triggering the long-running “temporary” suspension of online sales by the government which remains in force at present – three years on.

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