China's biggest lottery win shrouded by mystery,suspicion

 
(Xinhua)
Updated: 2009-10-20 17:31
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First came shock and envy. Then speculation on the identity of China's biggest-ever lottery prize winner. And finally came suspicion over the credibility of the country's lottery industry.

Public sentiment had made a dramatic turn two weeks after lottery officials announced on Oct 8 that the winning ticket worth almost 360 million yuan ($52.7 million) was bought in Anyang city, central China's Henan province.

The unidentified buyer has yet to come forward to claim the gigantic "Dual-colored Ball" jackpot of the China Welfare Lottery.

Calls from the public and the media have poured into the Henan Provincial Welfare Lottery Center, asking for the identity of the winner.

When lottery officials released the address of the outlet that sold the winning ticket in Anyang's Yindu district, reporters from across the country swarmed into the small store, trying to dig up details of the winner.

"I vaguely remembered that a man in his 30s or 40s bought that ticket," recalled the vendor, Chen Guixia. "He spoke with a local accent.

"The player is not a regular customer in my shop. I can't remember exactly how he looked and dressed," she said.

Before selling the record jackpot winning ticket, Chen had sold second prizes in the Welfare Lottery twice since opening for business in 2001.

Rumors circulating among the media and local community pointed to different versions on the winner's identity, including a truck driver, a security guard, a steel products store owner and a pool of four people.

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According to the Provincial Welfare Lottery Center, the buyer chose two lines of the same seven numbers, printed on a single ticket with a 44-draw spread, at a cost of 176 yuan at 2:55 pm on Oct 8. The ticket's total number of top prize stakes came to 88.

The Dual-colored Ball lottery consists of six red ball numbers from 1 to 33 plus one blue ball number from 1 to 16. A maximum of five bets can be printed on one ticket and players can spread the bet over multiple draws using the same set of numbers.

The jackpot numbers drawn that evening were 05, 12, 16, 25, 26, 27 and 31.

The winner must pay 20 percent of the win in a personal windfall income tax, or about 72 million yuan.


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China's biggest lottery win shrouded by mystery, suspicion
(Xinhua)
Updated: 2009-10-20 17:31

The previous single-ticket lottery record was held by a player in Jiayuguan, in northwest China's Gansu province, who won 113.8 million yuan in the Dual-colored Ball in November 2007 by spreading a set of numbers over 20 draws.

Members of the public used the popular website, Baidu.com, to allege the record win could be the result of manipulation of the draw. They cited a post dated Sept 21 on the website showing how to win a lottery jackpot of 300 million yuan by playing in an identical way.

The IP address of the anonymous person who lodged the post was also from Henan province, a coincidence that fueled suspicions of fraud.

Another post by an unidentified "insider of China's lottery industry" alleged on the Tianya BBS website on Oct 12 that the "Dual-colored Ball" lottery was used by lottery issuing institutions to "cheat money out of lottery players" as the video of the draw was pre-recorded.

The "insider"  said the lottery issuing agencies could use the two-hour time gap between last-minute sales and the draw to manipulate the results.

The Welfare Lottery's Dual-colored Ball is drawn three times a week: on Sunday, Tuesday and Thursday. The insider said the lottery issuing agency used a super computer to analyze sales data and the draw team pre-taped several versions of each high-jackpot draw. Higher officials of the lottery issuing agencies then allegedly decided which set to broadcast.

Lottery officials, however, have not commented on the allegation.

Lottery frauds and scandals have been reported in different cities in China over the past five years.

A software-design engineer surnamed Cheng broke into a database of the Welfare Lottery center in Shenzhen, Guangdong Province, on June 9 this year in an attempt to win 33 million yuan on the "Dual-colored Ball" lottery.

Employed by a high-tech company contracted with the lottery management center to work on a system upgrade, Cheng hacked into the system and falsified entries for five winning tickets.

Those tickets were among nine that won the top prize in the "Dual-colored Ball" lottery on June 9.  Each ticket was worth roughly 6.6 million yuan.

The management center detected the fraud shortly after it was announced there were nine winning tickets. After an investigation, they concluded the computerized sales system had been hacked and data changed.  They contacted police at 2 am on June 10.

Police assigned specialist on-line crime investigators, who staked out the prize collection center and arrested Cheng on June 12.

Cheng had failed to create actual tickets with the numbers, meaning he could not collect the money.

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In November 2007, Zhao Liqun, a 37-year-old lottery agent in the northeast city of Anshan, was given life imprisonment for taking advantage of a flaw in the Welfare Lottery "3D" system to illegally cash in lottery tickets for 28 million yuan.

In 2005, Zhao found that under certain conditions, it was possible to key in a valid number for the Welfare Lottery "3D" system within five minutes of the winning number being declared.

He then "bought" winning tickets and claimed the prizes from two or three lottery machines simultaneously. He also asked neighbors and friends to cash tickets at the Liaoning provincial Welfare Lottery Center for him.

The lottery center discovered the scam at the end of 2006 and reported it to the police, who arrested Zhao in January 2007.

Twelve people were found guilty of manipulating Sports Lottery scratch cards in the northwestern city of Xi'an in 2004 and were given prison terms ranging from six months to 13 years.


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China's biggest lottery win shrouded by mystery, suspicion
(Xinhua)
Updated: 2009-10-20 17:31

Though the odds of winning the Welfare Lottery's top prize is about one in 17.7 million, many ordinary Chinese buy tickets in the hope of improving their lives, generating huge returns every year.

Xia Xueluan, a professor with the Department of Sociology at Peking University, said such a gigantic win at such low odds had an influential effect on ordinary lottery players, who all expected a windfall.

"But suspicions over the big win are also normal, because similar scandals have happened in the past," Xia said.

He said an independent assessment agency of lotteries would be useful to regulate the industry, to oversee the use of lottery funds and release information on a monthly, quarterly or half-yearly basis, like companies listed on the stock markets.  "Transparency is important because it is about social justice and can give people confidence."

Li Guangyun, deputy director of Henan Provincial Welfare Lottery Center, insisted that the win of 88 stakes with a single ticket was true.

"The authenticity (of the win) is indisputable," Li said, responding to Internet accusations of manipulation. "We will ensure the security of the winner's personal information and open a special channel with no intrusion by the media and the public for him to claim the prize if necessary."

Under China's lottery regulations, top prizes must be claimed within 60 days of the draw and personal information about winners should remain secret.

If the prize is unclaimed, the money rolls over into the next jackpot.

Feng Baiming, director of Lottery Research Institute at Henan University of Finance and Economics, attributed the controversy over the 360 million yuan jackpot win to a lack of transparency.

Feng proposed a panel of player representatives to supervise the draws because the process "is not without room for improvement."

"But some speculation on the winner's identity has gone too far and it is against the spirit of protecting privacy," Feng said. "On this matter, the public's right to know is limited.

"What we need to study is how to prevent people from becoming addicted to expectations of a big windfall," he said.

Related readings:
China's biggest lottery win shrouded by mystery, suspicion Nation gets lottery fever after massive jackpot
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Since the first Welfare Lottery draw in 1987, China has sold 325.4 billion yuan in tickets. Sales of the Welfare Lottery, administered by the Ministry of Civil Affairs, hit 60.4 billion yuan in 2008 alone and the sales of all lotteries, including the Welfare and Sports lotteries, are expected to exceed 130 billion yuan this year.

The Ministry of Civil Affairs said a total of 110 billion yuan of public welfare funds was raised through the Welfare Lottery over the past two decades and the funds were earmarked on social welfare, relief and public utilities.

According to China's Regulations on Lottery Management, the money raised through lotteries is divided into three parts: the jackpot, the lottery management fees and the lottery public funds. The Ministry of Finance is responsible for supervising lotteries nationwide while the Ministry of Civil Affairs and the General Administration of Sport are in charge of managing the Welfare and Sports lotteries separately.

More than a third of the money collected is allocated to public funds, which were usually spent on public welfare, such as the development of public sports facilities, education and health care for the disabled, according to the ministries, while the jackpot accounted for another third.