The South Korean Lottery Commission, under the Ministry of Economy and Finance, has announced a comprehensive reform of the national lottery system for the first time in over two decades. The current system, established by the 2004 Lottery Act, has seen significant growth, with sales increasing from 3.5 trillion KRW in 2004 to 7.7 trillion KRW projected for 2025. The lottery fund, which supports public welfare projects, has also expanded from 900 billion KRW to 3.2 trillion KRW in the same period. However, the fixed allocation ratios for distributing lottery proceeds have been criticized for not reflecting changing fiscal needs and project demands. The new reforms aim to better align fund distribution with actual performance and public benefit.
The revised policy will impact ten designated agencies that currently receive mandatory allocations from lottery proceeds, as well as the general public who purchase Lotto tickets. The fixed 35% allocation rule will be relaxed, allowing for more flexible, performance-based distribution within the same overall percentage. The scope for adjusting allocations based on performance evaluations will be doubled from 20% to 40%, enabling more targeted support for effective programs. Additionally, the introduction of mobile Lotto ticket sales is expected to improve accessibility, especially for younger and tech-savvy consumers. Vulnerable groups are also expected to benefit from increased funding for public interest projects.
Implementation of these changes will begin with a pilot phase for mobile Lotto sales starting June 9, 2024, through the Donghaeng Lottery mobile website. During the first half of the year, mobile purchases will be limited to weekdays and capped at 5,000 KRW per person per round, with total mobile sales restricted to 5% of the previous year’s Lotto sales. The legislative amendment to the Lottery Act, reflecting the new allocation system and sunset clauses, will be submitted to the National Assembly in the first half of 2024. Full-scale mobile sales and further fund allocation reforms are planned for the second half of the year, following analysis of pilot results.
Frequently asked questions include whether mobile Lotto sales will replace traditional outlets; the answer is no, as both online and offline sales will coexist. Another common question is how the reforms will affect funding for public projects; the new system is designed to prioritize effective programs and better support vulnerable populations. The reforms also introduce a sunset clause for the mandatory allocation system, after which projects may be reclassified as public interest initiatives.
Metaqsol opinion: The South Korean lottery system reforms are grounded in a clear need for modernization and flexibility. By moving away from rigid allocation ratios and introducing performance-based funding, the government aims to ensure that lottery proceeds are used more effectively for public benefit. The pilot introduction of mobile Lotto sales is a practical response to changing consumer habits and should improve accessibility. Overall, these measures are likely to enhance transparency, efficiency, and social impact.