Tax on Lottery Winnings in China

This page explains how it all works, what counts as a single win, what happens with big Super Lotto and sports betting prizes, and how the rules differ if you won your money in Hong Kong or Macau instead.

What gets taxed, and what doesn't

The rules on this page cover the two state lotteries of mainland China: the China Welfare Lottery and the China Sports Lottery. That includes draw games like Double Color Ball and Super Lotto, the 3D and Pailie games, Kuai 3, scratch cards, and the sports betting products sold under the Jingcai brand.

Lottery winnings are what the tax rules call incidental income: money that lands on you by chance rather than by working, investing or renting something out. The tax office taxes this kind of income at a single flat rate, with no brackets and no allowances³.

The 20% tax on lottery winnings

The rate itself is short and flat: 20%. Lottery winnings are incidental income under the Individual Income Tax Law and its implementation regulations, incidental income is taxed at a proportional rate of 20%, and the taxable amount is the full value of each winning⁴. There are no brackets, no progressive scale and no difference between a modest win and a life-changing one: both are taxed at the same one-fifth of the prize⁵.

That 20% applies to the gross prize. Nothing is deducted for the cost of your tickets, and there is no allowance for money you spent on lottery tickets over the years⁶.

The rate is the same for the welfare lottery and the sports lottery, for draw games and instant tickets, and for residents and visitors alike. Anyone who redeems a taxable winning at a mainland lottery counter is subject to the same rule⁷.

The 10,000 yuan tax-free line

The one big relief is the exemption line. A single lottery win of 10,000 yuan or less is temporarily exempt from individual income tax. This applies to both the welfare lottery and the sports lottery, and it has been in place since the late 1990s⁸.

In practice, this covers the overwhelming majority of wins. Most prizes in the popular games are small: the sixth prize in Super Lotto is a fixed 200 yuan, and the third prize is a fixed 10,000 yuan, right on the line⁹. Most football and basketball betting payouts also sit well under it.

The exemption is per win, not per year or per person. Two separate wins in the same week, each under the line, are each exempt on its own. How multiple prizes in the same draw are treated is covered further down, under what counts as one win.

Over 10,000 yuan: why the whole prize is taxed

This is the point that catches people out. The 10,000 yuan figure is an exemption line, not a deduction. If your single win is at or below the line, no tax is due. If it is even one yuan more, the entire prize is taxed, not just the amount above 10,000¹⁰.

The same principle appears in the 1998 rule that first set the sports lottery exemption: winnings not exceeding 10,000 yuan are exempt, and winnings exceeding it are taxed in full¹¹. Official answers to the public have confirmed the full-amount treatment¹².

How the tax applies to each winning amount

Here is the whole system in one table, using the figures above.

The exemption line and the rate come from the Individual Income Tax Law framework, restated in a 2024 announcement issued jointly by four departments: the Ministry of Finance, the State Taxation Administration, the Ministry of Civil Affairs and the General Administration of Sport¹. That announcement, which took effect on September 1, 2024, also confirmed that tickets sold before that date but still unredeemed are handled under the same rules¹.

What counts as "one win"

The exemption and the tax both attach to a single winning, so the definition matters. For computer lottery, meaning the terminal-printed draw games and sports betting products, all prizes won by the same person in the same draw of the same game count as one single winning².

So if you hold five winning tickets in the same Double Color Ball draw, the prizes are added together and treated as one win for tax purposes. If that total is at or below the line, it is exempt; if it is more, the whole total is taxed. But a prize in Monday's Kuai 3 draw and a prize in Tuesday's draw are separate wins, each judged against the line on its own.

For sports betting, the redemption rules state it plainly: where a single bet's winning amount exceeds 10,000 yuan, the redeemer must pay individual income tax according to law, with the sports lottery institution handling the withholding¹³.

Super Lotto prizes and the tax

Super Lotto is the game that produces the biggest taxable wins for most people. A basic bet costs 2 yuan, and the optional additional bet costs 1 yuan on top. The first and second prizes are floating, funded from 49% of the prize money into the jackpot pool and 2% into an adjustment pool, and each bet's first or second prize is capped at 5 million yuan. A first prize won with the additional bet attached pays 80% of the corresponding basic bet prize⁹.

When someone hits the cap, the tax is simply deducted before the money moves. Press coverage of large Super Lotto wins describes the payout the same way: the prize arrives after the income tax has been deducted¹⁴. A 5 million yuan first prize therefore means 1 million yuan in tax and 4 million yuan in your hands, with nothing further for you to file.

The single-bet limits make splitting a big win into small claims academic anyway: a single bet number is limited to 20,000 yuan of stake without the additional bet, or 30,000 yuan with it⁹.

Sports betting (Jingcai) winnings

The Jingcai sports lottery products, the football and basketball games sold at sports lottery counters, run on the same rule described above: a single win over the line is taxed in full, with the sports lottery institution doing the paperwork¹³.

The prize structure explains why most payouts stay under the line. In the single-match win-draw-loss football game, a single-match bet's prize is capped at 100,000 yuan, with parlays of six legs or more capped at 1,000,000 yuan per bet and a maximum stake of 20,000 yuan per ticket¹⁵. The basketball big/small game has the same 100,000 yuan single-bet cap and a 20,000 yuan ticket limit¹⁶, and the single-match winning margin game also caps a single bet's prize at 100,000 yuan¹⁷.

So a typical winning ticket pays a few hundred to a few thousand yuan, tax-free. A lucky parlay that clears the line crosses into taxable territory, and a payout above the line means the tax is withheld at the counter.

Where your ticket money goes

The tax on winnings is only one slice of what the state takes from a lottery. The bigger slice is built into the ticket price before anyone wins.

Each game allocates its sales by fixed percentages set by the Ministry of Finance. The single-match win-draw-loss football game splits sales 73% to prizes, 9% to issuance fees and 18% to the public welfare fund¹⁵. Super Lotto splits its sales 51% to prizes, 13% to issuance fee and 36% to the public welfare fund⁹. The instant welfare lottery games approved in 2022, including the scratch game Feichang Youxi, allocate 65% of sales to prizes, 15% to issuance fee and 20% to the public welfare fund¹⁸. In 2019 the prize ratio for quiz-type games, the sports betting products, was reduced from 73% to 71%¹⁹.

So on a typical ticket, roughly half to two-thirds of your money funds prizes, and the rest funds the lottery's operation and public welfare programs. The tax you pay on a big win comes on top of that.

A short history of the rule

The exemption line is older than most players realize. It dates to 1998, when the Ministry of Finance and the State Taxation Administration issued a notice on sports lottery winnings: a single win of 10,000 yuan or less was exempt from individual income tax, and anything above was taxed in full¹¹. A parallel notice from 1994 covered the welfare lottery's forerunner¹². The tax office's own case files from the era show the rule being applied to ordinary claims, such as a 2008 case where a 9,000 yuan sports lottery win was confirmed as exempt²⁰.

What changed in 2024 was not the rate or the line but the machinery. The four-department announcement of August 2024 restated both, and for the first time set out in one place who does the paperwork: the lottery institutions¹. The exemption policy continues unchanged after the announcement, as tax authorities across the country have confirmed⁷.

What to expect when you claim a prize

The practical side is that you rarely deal with the tax office at all. The lottery institution or sales outlet withholds the individual income tax and remits it for you when you redeem a taxable winning, and you receive the after-tax amount¹.

There is some paperwork at the counter, and it kicks in well below the tax line. When a computer lottery redemption exceeds 3,000 yuan, the outlet must register the real-name identity and redemption information of the person claiming¹. For computer lottery wins above 3,000 yuan up to and including 10,000 yuan, the lottery institution handles an exemption filing on your behalf; for wins above the line on computer or instant tickets, it handles the tax filing⁶. In other words, even a tax-free prize in that range involves showing ID and being recorded, but the filing is done for you.

For small prizes, you typically just hand over the ticket and collect the cash. For large prizes, you claim at a provincial lottery center rather than a street outlet, and the tax is deducted before the transfer.

Hong Kong and Macau

Everything above applies to the mainland's welfare and sports lottery only. Winnings from Hong Kong's Mark Six and from betting with The Hong Kong Jockey Club are not mainland lottery winnings and are not taxed under this system. The same goes for money won at Macau casinos or from Macau SLOT products: those winnings sit outside the mainland's individual income tax rules for lottery, and the exemption line and the flat rate simply do not apply to them.

If you are a mainland resident who won money in Hong Kong or Macau, the position is different from winning on a mainland ticket, and the rules on this page do not travel with you. For how those places work in practice, see our pages on gambling trips abroad from China and on the individual venues.

Quick answers for first-timers

• Do I pay tax on a small prize? Not if the single win is at or below the exemption line⁸.
• Do I have to file a tax return? No. The lottery institution withholds the tax and does the filing when you redeem¹.
• Why is a prize just above the line taxed so heavily? Because the whole prize is taxed once you cross the line, not just the excess¹⁰.
• Do my several winning tickets in one draw count separately? No. For computer lottery, all prizes won by the same person in the same draw of the same game are one win².
• Is the rate different for foreigners? No. The same rate and exemption apply to anyone redeeming a mainland lottery ticket⁷.
• Where does the withheld tax go? To the state treasury, remitted by the lottery institution on your behalf¹.