China's lottery sales rose by 30 per cent year on year to hit 60.3 billion yuan (HK$74.2 billion) in the first quarter of this year, an increase of 13.9 billion yuan, the Ministry of Finance said. The lottery is legal on the mainland, unlike other forms of gambling, and is regarded as a money maker for welfare projects. Funds from sales are split into prize winnings, lottery-management fees, and public-lottery funds. The latter are used to finance social-welfare programmes. From its launch in 1987, the lottery in China has grown into the largest one worldwide, according to Lau Ting, chairman of China LotSynergy, a provider of game products and terminal equipment. Last year, lottery sales in the country rose 33.3 per cent to 222 billion yuan. Sales of welfare-lottery tickets jumped by 32 per cent year on year to 128 billion yuan, while sales of sports-lottery tickets rose 35 per cent to 93.8 billion yuan. 'The growth is normal, given the increase in wealth in the nation's society,' said Peter Cao Hui, an analyst with Guosen Securities. In fact, he added, the growth of the lottery industry on the mainland lagged behind growth in the gaming industry in Macau, which surged 42 per cent last year. 'The Chinese government wants the lottery to grow steadily,' Cao said. Buoyed by the growth of the industry, Hong Kong-listed China LotSynergy reported first quarter turnover as up 38.7 per cent year on year to HK$155 million. Quarterly net profit increased to HK$22.7 million, from HK$19.5 million a year earlier. 'Future growth will come from new distribution channels,' said Lau, adding that the government had approved the sale of lottery tickets over the internet and by telephone last October. 'LotSynergy will reinforce its development and competitive advantages in the new media-lottery business segment,' she said. The company had already recorded growth of approximately 360 per cent in its telephone-lottery business compared to the same period last year, according to Lau. And she said it had received new orders for 3,000 third-generation terminals this year, with over 20,000 terminals connected at more than 860 sales venues across 28 provinces in China. Daily sales per terminal in the first quarter averaged 2,900 yuan, up 25 per cent year on year. Income from welfare-lottery ticket sales accounts for about 80 per cent of LotSynergy's revenue.