A cheap daydream: Young Chinese buy up lottery scratch cards amid difficult job market

Amid a challenging job market and uncertain economic prospects, Chinese youth have turned to the lottery for some combination of a fun pastime, a respite from the rat race, and even a shot at an overnight windfall.

Joyce ZK Lim

Joyce ZK Lim

The Straits Times


Scratch card shortages have made local headlines as lottery stores across the country ran out of stock for days at a time. PHOTO: THE STRAITS TIMES

June 4, 2024

SINGAPORE – Lottery scratch cards, which offer players a chance to win over one million yuan (S$190,000) for a modest outlay, have been selling at record high volumes in China since the Covid-19 pandemic.

They have grown so popular that the state-regulated supply can hardly keep up with demand. Since April, scratch card shortages have made local headlines as lottery stores across the country ran out of stock for days at a time.

“China Red”, “Joyful Encounter” and “Good Luck Tenfold” were among the auspiciously named scratch cards, mostly priced between five yuan and 50 yuan, that have been missing from store shelves.

Fuelling the scratch card boom are young people, who have embraced what is often seen as an older person’s game.

Amid a challenging job market and uncertain economic prospects, Chinese youth have turned to the lottery for some combination of a fun pastime, a respite from the rat race, and even a shot at an overnight windfall.

“Who knows, if you win a big prize you won’t have to work any more,” tech company employee Huang Yuxin, 26, told The Straits Times.

The game is simple and gratification is instant. Players buy a card, scratch off the surface, then follow the written instructions – usually some variation on searching for a specific symbol or number – to deter­mine if they have won some­thing.

Most of the time, they get nothing. In the rarest of cases, they can win upwards of one million yuan.

Winning probabilities and payouts depend on the type of scratch card. In one example, a 30-yuan scratch card leaves players empty-handed 64 per cent of the time, breaking even 25 per cent of the time, winning amounts from 50 yuan to 10,000 yuan with exponentially decreasing odds – and with a one in five million shot of walking home with the top prize of one million yuan.

In 2023, sales of scratch cards, or instant lottery tickets – one of five state-sanctioned lottery types – surged to 119 billion yuan, more than double the amount in 2022. The trend continued into the first quarter of 2024, with sales reaching 39 billion yuan, a 10-year-high, according to figures from China’s Finance Ministry.

Only licensed vendors can sell scratch cards. Apart from lottery shops, the cards can also be found at licensed convenience stores and even some cafes or bubble tea joints capitalising on the lottery’s popularity to attract customers.

Almost 85 per cent of lottery players are 18 to 34 years old, and over 60 per cent have at least an undergraduate degree, according to an October 2023 report by Chinese market research institute Mob.

Administrative manager Wang Bing, 31, who spends 100 yuan on the lottery every two weeks, tells ST that scratching cards with friends is a fun group activity, and that the game is “very de-stressing”.

On the Instagram-like platform Xiaohongshu, users have devised a host of novel applications for the lottery. Some make bouquets out of scratch cards as gifts for loved ones; others use these cards to motivate themselves to go to work.

Wrote one Xiaohongshu user from Guangdong who has a scratch card displayed at her desk: “I’ll scratch one row every day, and when the (top prize) is mine, I’ll quit my job and travel the world.”

Freelancer Xu Chenxi, 25, is a self-professed scratch card addict who spends 1,200 yuan to 1,800 yuan on the lottery every week, after getting hooked when he won 700 yuan off one card in March.

Despite making net losses on scratch cards, he told ST the appeal of the game lies in the thrill and anticipation of winning. “You’ll never know, the next card you scratch could win you 100,000 yuan.”
Why lotteries?

Dr Dan Wang, chief economist at Hang Seng Bank in Shanghai, said: “The lottery is a form of cheap entertainment which satisfies the needs of stressed-out young people in China.”

A contributing factor to this stress is that “the job market for the youth remains harsh, as many companies continue their restructuring this year”, she told ST.

Youth unemployment stood at 14.7 per cent in April – almost thrice the surveyed urban unemployment rate – and is expected to go up as a record 11.79 million college graduates join the workforce in 2024.

Meanwhile, lay-offs and wage cuts across multiple industries, from tech to finance to property, have exacerbated worries about job security.

Mr Xu, the freelancer, concurs.

“The economic environment is not good: People can’t find jobs, incomes are not high, and there may be loans to pay off,” he noted. “Young people, who tend to prefer ‘lying flat’, could thus be pinning their get-rich hopes on the lottery instead.”
Coping with shortfalls

While gambling is illegal in China, state-run lotteries have been permitted since the 1980s, when the government saw these as a tool to fill an urgent need: raising funds for public welfare spending.

The country today has two lottery operators – China Welfare Lottery and China Sports Lottery – both of which told local media that the scratch card shortages were the result of sky-high demand that production and supply could not keep up with. The shortages would take some time to ease, they added.

This has left some lottery store owners, whose revenues are a margin of the tickets they sell, high and dry. A store owner in Beijing told ST that since April, he had been receiving only 30 per cent of his usual supply of scratch cards, and expects this to remain the case for the coming months. As a result, his income has taken a huge hit, but he still has to pay rent.

The former salesman in his 50s, who declined to give his name, said he had only just started his business six months ago, after deciding that the booming demand for scratch cards would assure him of a steady income. In hindsight, this was “very unlucky”.

The scratch card shortages have drawn speculation – since refuted by the lottery companies – that the authorities had sought to control the cards’ booming sales.

Dr Wang believes a crackdown is unlikely. By law, 20 per cent of the proceeds from scratch card sales go towards a public welfare fund that finances social projects in areas such as eldercare and child services.

With taxes collected from companies and individuals falling since the start of the year, the government needs new sources of revenue, such as that from fines and lotteries, she said.

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