Bil­lions of main­land China lottery funds mis­used: re­port

The China Post - - MARKETS -

Nearly US$3 bil­lion gen­er­ated from Peo­ple’s Re­pub­lic of China state lot­ter­ies — a quar­ter of the funds they raised in re­cent years — have been “mis­ap­pro­pri­ated” through em­bez­zle­ment and other abuses such as buy­ing cars, staterun media said on Fri­day.

A to­tal of 16.9 bil­lion yuan (US$2.7 bil­lion) raised by lot­ter­ies was used il­le­gally, the gov­ern­ment-pub­lished China Daily said, cit­ing of­fi­cial au­di­tors.

Gam­bling is illegal in main­land China ex­cept where it is run by the gov­ern­ment or the pro­ceeds do­nated to char­ity, and of­fi­cial lot­ter­ies — which some­times also of­fer sports bet­ting — are pop­u­lar.

At the same time cor­rup­tion is wide­spread, with the Chi­nese Com­mu­nist Party (CCP) at­tempt­ing to as­suage public anger with a heav­ily pub­li­cized crack­down.

The lottery funds — rep­re­sent­ing a quar­ter of rev­enues from 2012 to 2014 — were mis­used “through the pur­chase and es­tab­lish­ment of of­fice build­ings, or has been em­bez­zled,” the re­port said.

Lottery funds were used to “or­ga­nize over­seas travel for of­fi­cials” and to buy ve­hi­cles, it added.

It did not spec­ify whether any of­fi­cials had been pun­ished for the abuses, say­ing only that some were “blamed,” while bil­lions in as­sets had been “re­cov­ered.”

Since launch­ing in 1987, the main­land’s main state lottery has brought in rev­enues of around two tril­lion yuan, ac­cord­ing to of­fi­cial media.

Prof­its from the scheme are meant to fund sorely needed so­cial wel­fare projects but many prov­inces do not rou­tinely dis­close how the rev­enues are spent.

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