National Lottery Sales Overview - In July, total lottery sales reached 51.949 billion yuan, a year-on-year decrease of 2.706 billion yuan, or 5.0%, primarily due to the high sales base from the previous year's UEFA European Championship [2][4] - Welfare lottery sales amounted to 17.928 billion yuan, an increase of 0.293 billion yuan, or 1.7% year-on-year [2][4] - Sports lottery sales were 34.022 billion yuan, a decrease of 2.999 billion yuan, or 8.1% year-on-year [2][4] Cumulative Sales Data - From January to July, total lottery sales reached 369.803 billion yuan, an increase of 6.670 billion yuan, or 1.8% year-on-year [2] - Welfare lottery sales for the same period were 125.037 billion yuan, up by 2.383 billion yuan, or 1.9% year-on-year [2] - Sports lottery sales totaled 244.766 billion yuan, an increase of 4.287 billion yuan, or 1.8% year-on-year [2] Sales by Lottery Type - In July, sales of different lottery types were as follows: - Lotto and digital lottery sales were 15.196 billion yuan, an increase of 0.269 billion yuan, or 1.8% [4] - Betting-type lottery sales were 21.916 billion yuan, a decrease of 6.255 billion yuan, or 22.2% [4] - Instant lottery sales were 10.969 billion yuan, an increase of 3.170 billion yuan, or 40.7% [4] - Keno lottery sales were 3.868 billion yuan, an increase of 0.110 billion yuan, or 2.9% [4] - Cumulatively, from January to July, sales by type were: - Lotto and digital lottery: 104.551 billion yuan, a decrease of 0.047 billion yuan, or 0.4% [4] - Betting-type lottery: 162.173 billion yuan, an increase of 0.0079 billion yuan, or 0.1% [4] - Instant lottery: 78.928 billion yuan, an increase of 7.544 billion yuan, or 10.6% [4] - Keno lottery: 24.149 billion yuan, a decrease of 0.048 billion yuan, or 2.0% [4] Regional Sales Performance - In July, 8 provinces saw an increase in lottery sales, with notable increases in Henan (0.29 billion yuan), Xinjiang (0.17 billion yuan), and Shandong (0.17 billion yuan) [6] - Conversely, 23 provinces experienced declines, with significant drops in Zhejiang (0.59 billion yuan), Jiangsu (0.48 billion yuan), and Hunan (0.33 billion yuan) [6] - From January to July, 20 provinces reported increased sales, with Shandong (1.51 billion yuan), Hubei (1.14 billion yuan), and Henan (0.93 billion yuan) leading the growth [6] - 11 provinces saw declines, with the largest decreases in Jiangxi (0.54 billion yuan), Sichuan (0.47 billion yuan), and Guizhou (0.36 billion yuan) [6]

Core Viewpoint - China's lottery sales reached a historical high in the first half of 2025, with total sales of 317.85 billion yuan, reflecting a year-on-year growth of 3% [1][2]. Group 1: Lottery Sales Overview - In the first half of 2025, the total lottery sales in China amounted to 317.85 billion yuan, marking a historical record [1]. - The growth rate of lottery sales has gradually slowed down, with a significant increase of 36.5% in 2023, followed by a decrease to 7.6% in 2024, and further down to 3% in the first half of 2025 [1]. - The lottery sales revenue has consistently increased since 2021, recovering from a dip below 400 billion yuan in 2020 due to regulatory changes and the pandemic [1]. Group 2: Distribution of Lottery Sales - The China Welfare Lottery Management Center and the Sports Lottery Management Center are the two main institutions responsible for lottery issuance [2]. - In the first half of 2025, the Welfare Lottery generated sales of 107.11 billion yuan (up 2.0%), while the Sports Lottery sales reached 210.74 billion yuan (up 3.6%) [2]. - Among different types of lottery sales, the sales of betting-type and instant lottery tickets showed growth, while the sales of lottery number games and Keno tickets experienced slight declines [2]. Group 3: Purpose of Lottery Funds - The primary purpose of issuing lotteries is to raise funds for social welfare and sports, with a portion of the sales revenue allocated to public welfare funds [3]. - The distribution of lottery public welfare funds is managed according to government regulations, with 50% allocated to central and local governments for social welfare and sports initiatives [3]. - Recent disclosures indicate that in 2024, Beijing's lottery sales reached 17.515 billion yuan, with 2.905 billion yuan retained for local public welfare funds and 2.221 billion yuan allocated for distribution [3].

Core Viewpoint - The lottery industry is experiencing a decline in profitability, leading many companies to close their lottery stores despite initial high expectations for revenue generation from lottery sales [2][5][20]. Sales Performance - In May, the national lottery sales reached 57.036 billion yuan, a year-on-year increase of 9.418 billion yuan, representing a growth of 19.8% [4]. - The sales breakdown for May shows that: - Lotto digital lottery sales were 16.212 billion yuan, up 3.2% year-on-year - Betting lottery sales were 25.752 billion yuan, up 20.4% year-on-year - Instant lottery sales were 11.341 billion yuan, up 67.8% year-on-year [4]. Market Dynamics - The surge in instant lottery sales has attracted numerous individuals and companies to open lottery stores, particularly in large shopping malls [5][20]. - However, the profitability of these stores varies significantly due to differences in foot traffic and consumer behavior across different shopping venues [5][20]. Operational Challenges - The operational costs for lottery stores in commercial complexes are high, with monthly rents exceeding 10,000 yuan and initial setup costs around 400,000 yuan [11][13]. - Despite high sales potential, the average monthly sales for these stores are around 300,000 yuan, leading to a commission income of approximately 24,000 yuan, which is insufficient to cover costs [13][21]. Supply Chain Issues - The supply of instant lottery tickets has faced constraints, particularly from April 2024, exacerbating the operational difficulties for lottery stores [15][21]. - Frequent stock shortages have resulted in customer loss and increased operational complexity, with sales dropping by 20% after the Spring Festival in 2025 [16]. Industry Trends - The lottery industry saw a peak in sales around 2023-2024, but many companies began exiting the market after realizing unsatisfactory financial returns and inadequate support from management [20][21]. - The decline in average transaction value per customer has been a significant factor in the decision to close stores, particularly in high-rent areas where foot traffic has decreased [21][22]. Regulatory Environment - Companies face challenges related to compliance with legal and regulatory requirements, which complicates operations and can lead to significant financial losses due to delays in approvals for new sales points [22].

Core Insights - The company decided to close several lottery stores due to continuous losses since last year, with no month showing profitability [2] - The sales of instant lottery tickets, which accounted for 90% of total sales, have been declining since April 2024, despite a temporary spike in May due to base effect [2][11] - The overall lottery sales in May reached 57.036 billion yuan, a year-on-year increase of 19.8%, driven by sports events and low sales in the previous year [2][3] Sales Performance - In May, the sales figures for different lottery types were as follows: - Lotto digital lottery: 16.212 billion yuan, up 3.2% year-on-year - Guessing lottery: 25.752 billion yuan, up 20.4% year-on-year - Instant lottery: 11.341 billion yuan, up 67.8% year-on-year [3] Market Dynamics - The lottery industry saw a surge in new entrants due to the rapid growth of instant lottery sales in previous years, leading to increased competition and store closures [4] - Many businesses viewed lottery stores as fixed-income investments, but the actual revenue from sales commissions (7-8% of sales) proved insufficient to cover operational costs [4][5] Cost Structure - The company invested over one million yuan in store renovations and operations, but revenue could not cover these costs [5] - The average monthly cost per store is approximately 33,000 yuan, while average monthly sales are around 30,000 yuan, leading to a significant shortfall [9] Operational Challenges - High management costs in commercial complexes, including rent over 10,000 yuan/month and renovation costs of 30,000 to 50,000 yuan, further strain profitability [8] - The supply shortage of instant lottery tickets in 2024 exacerbated operational difficulties, leading to a 20% drop in sales [11] Industry Trends - The lottery industry experienced a peak in sales in 2024, but many businesses faced disappointing financial returns and chose to exit the market after a short period [14][15] - The decline in average spending per customer and reduced foot traffic in high-rent areas contributed to the decision to close stores [15][16] Regulatory Issues - The company faced challenges with regulatory approvals, which delayed operations and resulted in significant financial losses [16]

Summary of Key Points Core Viewpoint - The overall lottery sales in China for the first quarter of 2025 showed a slight decline of 0.6% year-on-year, primarily driven by a significant drop in instant lottery sales, while the growth in sports betting lottery sales provided some support to the overall figures [2][3]. Sales Performance - Total lottery sales reached 148.59 billion yuan in the first quarter, a decrease of 8.75 billion yuan compared to the previous year [2]. - Breakdown of sales: - Lotto sales: 41.66 billion yuan, down 12.62 billion yuan (2.9% decline) [2]. - Sports betting sales: 64.30 billion yuan, up 63.51 billion yuan (11.0% growth) [2]. - Instant lottery sales: 33.48 billion yuan, down 54.93 billion yuan (14.1% decline) [2]. - Instant lottery, sports betting, and lotto accounted for 22.5%, 43.3%, and 28.0% of total sales, respectively [2]. Market Dynamics - The decline in lottery sales is attributed to several factors, including a long-term shortage of instant lottery tickets, which has affected the sustainability of new lottery shops [3][4]. - Increased competition among lottery shops has been noted, with the distance between shops reducing from 300 meters to 150 meters, leading to intensified competition in certain areas [4]. - The expert indicated that the perception of sales decline due to ticket shortages is not entirely accurate, as the core issue lies in the supply of instant lottery tickets [4]. Supply Chain Issues - Instant lottery ticket shortages have directly impacted the revenue of lottery shops, with some shops reporting that instant lottery sales account for a significant portion of their total sales [5]. - For instance, one shop reported that 58% of its monthly sales came from instant lottery tickets, but the supply was insufficient to meet demand [5]. - The supply of instant lottery tickets is prioritized for experience centers, leaving traditional shops with limited allocations [5]. Consumer Behavior - The purchasing power of consumers is also a critical factor affecting lottery sales, as a decline in consumer income leads to reduced spending on lottery tickets [6]. - The expert noted that while the number of lottery buyers has remained stable, the average spending per customer has decreased, indicating a shift in consumer behavior [5][6].