The Chinese government launched a New Infrastructure Scheme, emphasising new technologies such as blockchain.
Blockchain, as future technology, has been applied in cross-border payment, copyright, traceability, gaming and other scenarios. After several years of development, these are no longer new. In the past year or two, people have had new expectations on how to make use of blockchain.
One of the most common applications of the blockchain is the electronic invoice. Since “ticket-like-product” can be easily realised on the blockchain, innovations about the lottery on blockchain started to flourish.
Recently, a China A-Shares company Hongbo Co Ltd (Hongbo) launched its first blockchain instant lottery product in Cambodia as a pilot project.
Why does the lottery need the blockchain?
Information asymmetry between the lottery operators and the buyers causes the buyers to question the randomness and fairness of the lottery. However, blockchain can solve the problem of security and transparency because of its tamper-proofing and traceability.
In 2019, the Shenzhen Welfare Lottery Issuance Center (Shenzhen Fucai) adopted blockchain technology to achieve the goal of lottery transparency.
After Shenzhen Fucai, China Welfare Lottery Issuing Centre also began to research blockchain. It has launched a project on the Notarization of Electronic Lottery Technology Using Blockchain Smart Contract, with a budget of 2.8487 million yuan. The research team has been currently studying how to apply the blockchain smart contract technology in the electronic lottery result announcement system, which aims to solve the critical problem of non-notarization and non-auditability of the electronic lottery system in the current national welfare lottery industry.
Chinese leading enterprises started to seek fortune in overseas lottery markets.
On November 20, 2019, A-shares listed company Hongbo recently announced that it had executed a “Blockchain Ticket Supply Chain System Services Agreement” with Jin Xiang Co., Ltd. (金象公司).
Jin Xiang is a wholly-invested subsidiary of Hong Kong’s Jin Cai international Holding Limited, and operates in Cambodia.
Hongbo will provide blockchain services, as well as lottery ticket services that “suit the local Cambodian style and ticket-purchasing customs,” under its agreement with Jin Xiang.
With Hongbo’s proprietary lottery chain platform, every step from issuing tickets to reward announcement will be recorded on the blockchain. At the same time, the end-users’ (lottery buyers) purchase custom and reward redemption process won’t be changed.
Why does the Chinese state welfare lottery favour the blockchain lottery?
The instant lottery has a long history in China, but it experienced decreasing in popularity in the past decades. Until 2019, instant lottery sales finally started to rebound. National lottery sales reached 28.522 billion yuan, a year-on-year increase of 26.6%. Among them, instant welfare lottery sales reached 14.964 billion yuan, a year-on-year increase of 31%, and the market accounted for 7.82%. The instant lottery seems to be booming again soon.
According to the 13th Five-Year Plan, the overall guideline of the country’s short term social and economic development plan, blockchain technology plays an essential part in the New Infrastructure Scheme. By the year 2025, the market value of the blockchain industry will reach 38.9 billion yuan.
Therefore, the state-owned lottery will embrace blockchain technology, not only for the sake of reviving instant lottery furthermore.
The bigger picture of blockchain lottery is that once state-owned lottery players are more familiar with blockchain technology, this will benefit the online gaming industry correspondingly whether it is a regulated market or not.