Top Chinese Officials Arrested After Siphoning Billions from Chinese Lottery

Top Chinese Officials Arrested After Siphoning Billions from Chinese Lottery

It appears that China loves nothing more than parading evildoers out in front of everyone.  In a case earlier this month, four senior lottery officials were paraded out in front of the Chinese media and their videotaped confessions publicized. The confessions? That they were responsible for stealing nearly $20 billion from the Chinese Social Welfare Lottery.

Legal Gambling in China

Legal Gambling in ChinaGambling has been illegal on the Chinese mainland since the end of World War II, when Communists took over the country. Gambling is considered a vice by the Chinese Communist government, and vices are forbidden for good citizens. However, China does allow two lotteries on the mainland. The Chinese Sports Lottery funds all training and housing of Chinese athletes. These are the elite athletes in the country who are training to participate in either the Summer or the Winter Olympics. The other lottery is called the Chinese Social Welfare Lottery. The lottery is used to fund healthcare, housing, and other programs for the elderly and disabled in China.

There are only two places in China, where gambling is legal. Neither of them is on the mainland. One place where gambling is legal is the peninsula of Macau, a former Portuguese colony. Macau has grown to be the richest gambling area in the world, doing over $30 billion in business each year. This is more than three times the amount bet in Las Vegas each year. Currently, there are 38 casinos located in Macau. The other place in China where gambling is legal in Hong Kong, the former British colony. Rather than focus on casino gambling, Hong Kong’s focus is horse racing, which has been a passion on the island for centuries.

The Social Welfare Lottery

The Social Welfare Lottery is played by nearly 300 million people each week in China. It took in nearly 41 billion dollars last year. All of the money earned by the Welfare Lottery goes to help children who are orphans, senior citizens who have no family, housing and services for the disabled and people living in poverty. Jackpots from the Social Welfare Lottery can be over 10 million dollars, depending on what game is played. The lottery can be played through numbered balls or scratch off tickets, and different kinds of lottery games are offered.

The Crimes

The Chinese government estimates that as many as 14 government officials participated in the theft of lottery money. However, only the four most senior lottery officials were videotaped confessing. All of the perpetrators expressed remorse for their actions. They will be facing years in prison—although the Chinese government has made people convicted of this level of theft disappear in the prison system.

The crimes were first uncovered in 2015. During an audit, it was found that $7 billion worth of funds from the Social Welfare Lottery was missing.  Since all four of the senior lottery officials worked for the lottery for at least 15 years, the exact total of how much money was missing may never be known. Some officials have put the amount at $40 billion.

It took the Chinese government three years to fully look at the Welfare Lottery books, and run forensic audits of the company. Because the lottery does business mostly in cash or electronic payment, money is very difficult to trace.

The Chinese government, after the shocking news of the amount of money stolen from the welfare lottery, has ordered an investigation of the Sports Lottery as well. However, it doesn’t appear at this time that money was taken. The Chinese government continues the investigation.

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