The Ministry of Finance issued the revised "Regulations on the Management of Lottery Market Regulation Funds" which will be implemented according to the new rules starting in 2027.

On August 14, the Ministry of Finance revised the "Management Measures for Lottery Market Regulation Funds" in order to further strengthen and standardize the management of lottery market regulation funds, and to improve the efficiency of fund utilization in accordance with the relevant regulations on national budget management and lottery management. It was stated that the Ministry of Finance is responsible for formulating management measures for lottery market regulation funds, determining the overall annual budget scale and distribution plans for each province, clarifying overall performance targets, issuing budgets according to budget management procedures, and organizing budget performance management. The distribution of lottery market regulation funds is based on a factor method, which includes three categories: basic factors, guiding factors, and normative factors. Among these, basic factors (weight 25%) mainly include total population, number of sales venues, and local retention of lottery issuance fees. Guiding factors (weight 50%) mainly include the annual sales volume and per capita sales volume of key supported varieties or games, pilot demonstration achievements, and effectiveness in the use of lottery market regulation funds. Normative factors (weight 25%) primarily consist of local lottery market order, compliance in the use of lottery market regulation funds, and the regularity and quality of fund applications. The original text is as follows: Notice from the Ministry of Finance on Issuing the "Management Measures for Lottery Market Regulation Funds" Cai Zong [2026] No. 41 To the Finance Departments (Bureaus) of all provinces, autonomous regions, and direct-controlled municipalities, the China Welfare Lottery Issuance Administration Center, and the General Administration of Sports Lottery Management Center: In order to further strengthen and standardize the management of lottery market regulation funds and improve the efficiency of fund utilization, the Ministry of Finance has revised the "Management Measures for Lottery Market Regulation Funds" in accordance with relevant national budget management and lottery management regulations. It is hereby issued for your implementation. To ensure policy continuity, the budget execution for lottery market regulation funds for 2026 and related work will continue to follow the "Notice of the Ministry of Finance on the Issuance of the 'Management Measures for Lottery Market Regulation Funds' (Cai Zong [2021] No. 17)." The budget application and execution for 2027 and subsequent years will follow this notice. Based on the actual work situation, the date for the 2027 budget application will be adjusted appropriately. Provincial finance departments are requested to submit application materials by August 14, 2026. Ministry of Finance July 24, 2026 Management Measures for Lottery Market Regulation Funds Article 1 To strengthen and standardize the management of lottery market regulation funds, improve the efficiency of fund utilization, and promote the sustained and healthy development of the national lottery industry, these measures are formulated in accordance with the "Budget Law of the People's Republic of China," its implementing rules, the "Lottery Management Regulations" and their implementation details, and relevant regulations on the management of transfer payments from the central government to local governments. Article 2 The lottery market regulation funds referred to in these measures are funds allocated through the business fees of lottery issuance institutions remitted to the central finance. They are specially used to coordinate the development of the national lottery market between provinces, institutions, and varieties, reinforce lottery regulation, ensure the safety of lottery issuance and sales, maintain the order of the lottery market, and promote the public welfare attributes and social responsibilities of lotteries. These funds are distributed to localities through transfer payments from the central government. Article 3 The management of lottery market regulation funds is divided as follows: The Ministry of Finance is responsible for formulating the management measures for lottery market regulation funds, determining the total annual budget scale and the distribution plan for each province, clarifying overall performance targets, and issuing budgets according to budget management procedures, organizing budget performance management. The Ministry of Finance may organize or entrust third-party institutions to carry out key performance evaluations as needed. Lottery issuance institutions are responsible for establishing a market regulation mechanism within their systems, coordinating the actual situation of the national lottery market, reviewing their funding needs, proposing distribution recommendation plans and performance target review opinions; and simultaneously researching and proposing recommendations for the adjustment of distribution factors and weights when necessary based on market regulation needs. Provincial finance departments are responsible for coordinating the actual situation of the welfare lottery and sports lottery markets in their province, reviewing the funding needs and performance targets of lottery sales institutions, and proposing the funding needs and regional performance targets for their province; they are also responsible for the allocation and implementation of the budget, fund supervision, and budget performance management in their province. Lottery sales institutions are responsible for conducting project reserves for lottery market regulation funds within their units, applying for funding needs, and proposing performance targets. According to the provisions of these measures and the budgets and performance targets issued by provincial finance departments, they specifically organize budget execution and self-evaluation of performance. Article 4 The distribution and utilization of lottery market regulation funds should follow the principles of objectivity and fairness, overall coordination, highlighting key points, and valuing performance, taking into account the actual conditions in different regions. Funding should be tilted towards areas that implement key tasks and have outstanding work results, focusing on supporting the optimization of the lottery variety and game structure, and for preventing and resolving market risks, thereby effectively promoting the healthy development of the lottery industry. Article 5 The scope of use for lottery market regulation funds includes: (1) Enhancing lottery regulation capabilities. Mainly for organizing risk assessments of lottery sales activities, improving early warning capabilities for abnormal sales, and for implementing regular monitoring of illegal lottery sales and other illegal activities in the lottery market; fulfilling national lottery regulation requirements, organizing related special work; and improving expenditures on information technology means for lottery regulation. (2) Ensuring the safety of lottery issuance and sales. Mainly for upgrades and renovations of dedicated machine rooms, disaster recovery rooms, lottery drawing venues, prize redemption service venues, dedicated storage warehouses, sales systems, and for the purchase and maintenance of dedicated lottery betting devices. (3) Maintaining order in the lottery market. Main expenditures include enhancing access management for lottery sales venues, establishing standards for sales venues, conducting training for agents, standardizing agency behavior, and cooperating with relevant departments to combat illegal lotteries. (4) Conducting public welfare publicity for lotteries. Mainly for promoting the social welfare attributes of national lotteries and social responsibilities, for enhancing the credibility of comprehensive management of the lottery process, and for conducting risk tips for buyers to guide rational and sustainable lottery purchasing behavior. (5) Supporting innovation in lottery issuance and sales business. Mainly for conducting pilot work or innovative development in lottery game products, sales channels, and business operations. (6) Providing subsidies for costs that need to be maintained for basic operations of lottery sales venues that have been suspended due to force majeure and cannot be compensated through local retention of issuance fees. (7) Other expenditures related to lottery market regulation that are approved by the Ministry of Finance. The use of "conducting public welfare publicity for lotteries" and "supporting innovation in lottery issuance and sales business" does not include expenditures for lottery game awards, promotions, or marketing activities. The use of lottery market regulation funds should highlight key areas, focusing on the implementation of national requirements to promote the healthy development of the lottery market and strengthen regulation, while rationally distinguishing from local retention of issuance fee expenditures. Lottery market regulation funds may not be used for personnel expenditures of lottery agencies, daily public expenses, purchasing and maintenance of office equipment, "three public" expense expenditures, building office facilities, repaying debts, fines, donations, or any unauthorized projects unrelated to the development of the lottery industry. Except for the sixth use item mentioned above, funds may not be used for rent or operational subsidies for sales venues. Article 6 Lottery market regulation funds are distributed based on factor methods, which include three categories: basic factors, guiding factors, and normative factors. Basic factors (weight 25%) mainly include total population, number of sales venues, and local retention of lottery issuance fees. The local retention of lottery issuance fees refers to other issuance fees aside from the business fees remitted to the central finance. Guiding factors (weight 50%) mainly include the annual sales volume and per capita sales volume of key supported varieties or games, pilot demonstration results, and effectiveness of using lottery market regulation funds. The key supported varieties or games will be determined by the Ministry of Finance based on the actual regulation of lotteries and recommendations from lottery issuance institutions; pilot demonstrations refer to the pilot work explicitly conducted by the Ministry of Finance or formation of innovative demonstration achievements with national significance. Normative factors (weight 25%) mainly include the local lottery market order, compliance in the use of lottery market regulation funds, and the regularity and quality of fund applications. The Ministry of Finance may research and determine and timely adjust the sub-factors of these three categories based on relevant work conditions and recommendations from lottery issuance institutions. Article 7 The Ministry of Finance will review and score the self-evaluation results of lottery market regulation fund performance submitted by provincial finance departments, and based on this set performance evaluation adjustment coefficients to appropriately adjust the fund distribution situation. The performance evaluation adjustment coefficient will be determined according to the following table: Article 8 The Ministry of Finance will calculate and allocate provincial funds according to the following formula: The fund subsidy ratio for a certain province = (The basic factors for that province) / (Sum of the basic factors for relevant provinces) 25% + (The guiding factors for that province) / (Sum of the guiding factors for relevant provinces) 50% + (The normative factors for that province) / (Sum of the normative factors for relevant provinces) 25% Allocation number for a certain province = (Total annual budget for lottery market regulation funds) (The fund subsidy ratio for that province) (Performance evaluation adjustment coefficient) / (Sum of (other provinces' fund subsidy ratios performance evaluation adjustment coefficients)) If the allocation number calculated for a certain province exceeds its funding application number, the funds will be allocated according to the application amount. Article 9 The application for lottery market regulation funds proceeds as follows: Lottery sales institutions will propose project contents, funding needs, and performance targets for the budget year according to the use scope defined in these measures, while providing relevant information on fund management and utilization from the previous year, and submit these for review by provincial finance departments. Provincial finance departments will coordinate the actual situation of the welfare lottery and sports lottery markets in their region, review the funding needs of lottery sales institutions, and in conjunction with annual key regulatory work and project reserves, conduct research to propose funding needs, and by July 31 each year, submit paper and electronic versions of application materials to the Ministry of Finance. The application materials should include: relevant information from the previous year regarding fund management and utilization, specifically categorizing the project organization, fund utilization, and work results in accordance with the scope of use stipulated in Article 5; pilot demonstration results, local lottery market order, compliance in fund usage, etc. Proposed project contents for the budget year, necessity and feasibility, funding needs, regional performance targets, and expected results. Other materials required by the Ministry of Finance. This should encompass the overall situation of the province, differentiated between the welfare lottery and sports lottery systems. The Ministry of Finance will promptly forward relevant application materials to lottery issuance institutions. Lottery issuance institutions should devise lottery market regulation objectives and measures based on their systems development plan, annual key lottery issuance and sales work, and the execution situation of the previous years lottery market regulation fund, evaluate the circumstances of proposed projects, funding needs, and provide suggestions for fund distribution and review opinions on performance targets, as well as provide relevant foundational data for funding calculations, including the number of sales venues by province in its system for the previous year, amounts of retained lottery issuance fees by province, sales volumes of different games by province, scoring of pilot demonstration outcomes, effectiveness in utilizing lottery market regulation funds, orderliness of the lottery market, and quality of fund application regularization, along with other materials required by the Ministry of Finance, submitted in written form to the Ministry of Finance by August 31 each year. Provincial finance departments, lottery issuance institutions, and lottery sales institutions are respectively responsible for the authenticity and accuracy of the related application materials and foundational data. Article 10 The lottery market regulation fund budget allocation will be conducted in the following procedure: The Ministry of Finance, considering the status of lottery market development, the funding needs proposed by provincial finance departments, suggestions from lottery issuance institutions for distribution, review opinions on performance targets, and any unspent balances of business fees from lottery issuance institutions from the previous year, will reasonably determine the total scale of the lottery market regulation fund budget and overall performance targets for the following year, and will determine provincial budget amounts in accordance with these measures. The Ministry of Finance will issue the next year's lottery market regulation fund budget by October 31 every year, according to the Budget Law and relevant budget management regulations, and formally allocate the budget and performance targets within 90 days after the National People's Congress approval of the budget, and will notify the lottery issuance institutions and the relevant supervisory bureaus of the Ministry of Finance. Upon receiving the budget, provincial finance departments shall reasonably allocate and distribute the budget and performance targets within 30 days and notify the local supervisory bureau of the Ministry of Finance. Lottery sales institutions shall prepare project reserves for fund use in accordance with relevant budget management regulations, focusing on implementing major decision-making deployments, prioritizing projects according to importance, and establishing a project repository that is practical and sufficiently prepared. Provincial finance departments should audit the project repository in accordance with budget management regulations; in principle, projects not included in the repository cannot be allocated budget funds. Projects should be uniformly organized and executed by lottery sales institutions, with localities determining project participants based on actual circumstances and regulatory responsibilities, using funds according to budget management regulations. Article 11 Finance departments at all levels, lottery issuance institutions, and lottery sales institutions must comprehensively implement budget performance management requirements, strengthen performance target management, conduct performance monitoring and evaluations, and enhance the application of evaluation results. At the end of the annual budget execution, provincial finance departments should organize lottery sales institutions to conduct self-evaluations against performance targets, consolidating the overall use of lottery market regulation funds, and forming performance self-evaluation reports for their province, which must be submitted on time, ensuring that the performance self-evaluation of lottery sales institutions does not substitute for regional performance evaluations. Provincial finance departments and lottery sales institutions are responsible for the integrity, accuracy, and objectivity of self-evaluation work, strictly prohibiting fraudulent practices. Article 12 Finance departments at all levels, lottery issuance institutions, and lottery sales institutions shall distribute and utilize funds according to budget and treasury management regulations, standardize budget execution, strengthen internal controls, timely prevent and resolve various risks, and must not withhold, occupy, or divert funds, nor arbitrarily expand expenditure scopes or raise expenditure standards. In the use of funds, if it involves government procurement, it must comply with relevant laws, regulations, and systems pertaining to government procurement. Lottery market regulation funds should generally be utilized before the end of the year; unspent funds from that year should be managed according to relevant regulations on rollovers and surplus funds. Article 13 Lottery market regulation funds are subject to supervision by the finance, audit, and other departments. Finance departments at all levels, lottery issuance institutions, and lottery sales institutions should strengthen supervision over the use of lottery market regulation funds, carrying out accounting supervision and inspection in accordance with laws and regulations to identify and rectify relevant issues promptly, ensuring the security of funds. Lottery market regulation funds are included in the regular supervision process, and finance departments at all levels should strengthen the regular monitoring of budget execution by relying on the integrated system for budget management and transfer payment monitoring modules. Prompt action should be taken to address identified issues, with measures such as recovering allocated funds or reducing budgets being taken when necessary to reinforce supervision. The local supervisory bureaus of the Ministry of Finance should oversee the management and use of lottery market regulation funds according to their work responsibilities and the Ministrys requirements. Article 14 Finance departments at all levels, lottery issuance institutions, and lottery sales institutions and their staff shall be held accountable in accordance with the law for any abuse of power, negligence, or favoritism in the work of fund allocation, utilization, and supervision. Article 15 Provincial finance departments may develop specific implementation measures based on this approach, considering their local circumstances. Article 16 These measures shall come into effect from the date of publication and shall be implemented for a period of five years. This text is compiled from the Ministry of Finances official website, edited by Chen Siyu.