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Is opening a lottery station still a good business?

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Is opening a lottery station still a good business?

“The essence of lottery is a public welfare industry.

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The myth of getting rich overnight happens every once in a while.

The most recent time was on the evening of September 11, when a sports lottery store in Nancheng, Dongguan, Guangdong issued a grand prize of 191 million yuan, setting a new sports lottery winning record in Dongguan. Three days ago, on the 8th, a lottery player in Cangzhou, Hebei Province received a grand prize of 55.44 million yuan accompanied by a lottery shop owner.

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“When will it be my turn?” “I’m tired of the word ‘envy’.” “I’m so happy!”

The lottery shop owner is the person closest to this joy and the person who is most eager for good luck to come.

At the beginning of 2023, whether it is the traditional double-color ball, lottery, or the new scratch-off lottery, it has gained a large number of people, especially young people. Data from the Ministry of Finance show that from January to July 2023, a total of 214.683 billion yuan in lottery tickets was sold nationwide, an increase of 54.634 billion yuan or 34.1% year-on-year.

If buying a lottery ticket is a young person buying a spiritual comfort, then investing in a lottery shop is a thoughtful person betting on good luck.

Lin Chunshu, a 64-year-old Tianjin native, is one of them.

On weekend evenings in September, he lit up the booth sign as usual – a lottery sales booth surrounded by a commercial complex and a snack street. The sign had the same color as the Olympic rings, and the large white block was particularly conspicuous at night.

It’s hard for passers-by not to notice it. The five-color logo on the top is like a signal, releasing the temptation of wealth to people. At 8 o’clock in the evening, it was completely dark, so Lin Chunshu turned on five more spotlights.

People quickly gathered.

Every 2 minutes, someone comes to ask about scratch tickets. “There are only 20, 30, and 50 tickets, and the rest are gone.” After saying that, Lin Chunshu took a stack of lottery tickets and handed them to the guests one by one. Payment can be made later. Lin Chunshu knew that the people gathered around the site would have to wait at least 20 minutes, and the minimum number of tickets purchased was 6.

He was thoughtful and placed four rows of shared power banks and plastic chairs on the side of the lottery station for guests’ emergencies. “The daily turnover is about more than 10,000 yuan,” Lin Chunshu said. For an hour, guests kept coming and going. Rough calculation shows that this 30-square-meter lottery shop has an average daily customer flow of more than 100 people.

In an alley 500 meters away, Wang Kai, the owner of a sports betting shop, was not having an easy time. Half a year after opening, the store’s turnover has remained between 70,000 and 80,000 yuan per month. Calculated with an 8% rebate, his monthly income is about 5,000 to 6,000 yuan.

Similar to most locals – the average annual salary of employees in Tianjin’s urban private units in 2022 is 67,258 yuan. When converted into months, the average monthly salary is 5,604.8 yuan.

Many times, Wang Kai would remind himself, “You have to endure it, and you will get better slowly.” As for how long it would take, he didn’t know. What made him even more anxious was that lottery tickets were blooming all around.

When searching for lottery keywords on the map software, there are 6-9 shops or stalls within one kilometer of the area. Sports lottery and welfare lottery organizations are arranged in a circle, and even convenience stores have self-service ticket vending machines. Lin Chunshu recalled that around 2020, the speed of Tianjin lottery store openings entered an extremely fast climbing track.

The large number of practitioners means increased competition. Is opening a lottery shop still a good business?

“I have never seen a lottery station go bankrupt.” Miss Li, a lottery shop owner in Hangzhou, is born in the 1990s. She wants to sublet the lottery shop, but it has been half a month and she has not found anyone to take over.

When the lottery knocks on the door with a huge bonus, people who are deeply involved in it understand: This is like a suspended drama – it looks beautiful, but it may also fall to reality and be hit hard.

01 Average daily turnover of 1,000 yuan

For 37-year-old Wang Kai, he opened a lottery shop just to make money.

In a shopping mall near his home, he noticed that a vacant spot was occupied by automatic lottery vending machines. When it was time to eat, the customers waiting in line couldn’t bear the passage of time and came to the counter to buy a few scratch tickets. This became an opportunity for Wang Kai to pay attention to lottery. Before this, he knew nothing about the lottery market, had never bought scratch tickets, and had never pitched a two-color ball.

He worked in a machinery factory in Tianjin for more than 8 years. After leaving his job in 2017, he worked in real estate sales and drove an airport shuttle bus twice a day. His income was only enough to maintain basic expenses. In mid-2022, due to various reasons, he simply gave up his job and “retired” at home with his retired parents. However, the money bag was getting smaller and smaller, and he was thinking about doing something.

He considered returning to his old business and driving an online ride-hailing service, but his friends said the business was not easy to do. When hesitating, he thought of the lottery again. In the next few days, Wang Kai would take a second look whenever he passed by the lottery station and pay attention to the customer flow in the store. In order to verify whether he can make money, he pretends to be a customer and gets close to the shop owner.

He remembered that it was a small store less than 20 square meters. In addition to him, there were three lottery players crowded on the table on one side to scratch off their lottery tickets, and there were 5-6 people waiting in line behind them. The business of the small shop seemed to be booming. After chatting with the shop owner for a while, Wang Kai came to the conclusion that as long as he found the right place, he would definitely make money by opening a lottery shop.

His feelings are consistent with the booming lottery market. According to data released by the Ministry of Finance, the total revenue of the entire lottery industry in 2022 will reach 424.652 billion yuan, which is more than 18 billion yuan higher than Shenzhen’s fiscal revenue that year.

As for whether the lottery shop can make money, Wang Kai found that netizens had different opinions. Some said that the monthly income was over 10,000, and some were barely making ends meet. But the constant traffic at the lottery site allayed his concerns. As soon as New Year’s Day passed, he started contacting and preparing.

What Wang Kai was thinking was that his relatives had vacant shops along the street, and the rent could be offset by favors. He only needs to prepare a start-up capital for purchasing lottery machines, decoration and purchasing, which totals about 60,000 yuan, which he borrowed from his parents.

Opening the store was not as smooth as he thought. Sports lottery staff must review many aspects, including the shop owner, store size, assessing customer flow, and whether there are schools within 200 meters.

It seems like a simple requirement, but there will always be surprises during the actual operation. For example, the auditor believes that it is not acceptable to use round ceiling lights in stores, but must be rectangular, as well as the size of the signboard, the placement of the cabinets, etc. Wang Kai talked hard and finally passed the review.

On the opening day, Wang Kai vowed to his parents that he would repay the capital within one year and return the start-up capital of the store to his parents. Since then, he has opened the door at 9 a.m. every morning and closed the store at 9:30 or 10 p.m., and so on.

Compared to Wang Kai, Lin Chunshu seemed to be much more worry-free. The lottery station is the “gas station” for his retirement life.

He has been in the industry for 6 years and has participated in two World Cups. He remembers that when the World Cup started, the lottery tickets with a minimum price of 2 yuan a day could turn over 30,000 to 50,000 yuan a day, and the pile of waste tickets could be 70 to 80 centimeters high, leaving no time to clean up.

In 2020, Lin Chunshu’s store lease expired, and he moved to a lottery site in the commercial street to open a store. After two years of hard work, Lin Chunshu not only ushered in the World Cup, but also waited for the rise of scratch-off games. He feels quite satisfied. He lives a comfortable life in a lottery station in a commercial street without having to worry about the flow of customers.

In addition to shops and stalls, there are also people who engage in the lottery industry for the “icing on the cake” and want to make more money. Xu Baihua, 28, and Wang Qian, who is in her early 40s, are one of them.

In 2022, Xu Baihua left a teaching and training industry in Beijing and returned to his hometown in Tianjin to apply for civil servants. Although he successfully “landed”, he was thinking more about preparing for a rainy day: During the four years of wandering in Beijing, he only saved more than 80,000 yuan in savings to buy a house and get married. This money was obviously not enough, and he wanted to start a side business.

He saw reports of young people buying lottery tickets on social media, but he didn’t take it seriously at first. One time I checked my phone and a piece of content was pushed to me: Lottery, the first choice for young people as a side job. He clicked it and looked at it, thinking that he could give it a try and use it as his own “piggy bank”.

Xu Baihua spent nearly 70,000 yuan in savings to place three welfare lottery machines on the restaurant floor in a nearby business district, selling only scratch-off tickets. He did some calculations and found that based on the established profit of 7%, he could sell for 1,500 yuan to 2,000 yuan a day, and it would take more than a year to recover the capital.

On weekdays, he has to go to work, so he can only walk around the machine when he is off work, paying attention to the flow of people and lottery purchases. On weekends, Xu Baihua will put aside unnecessary socializing, put on a red vest and go to the machine, trying his best to greet passers-by to come and buy lottery tickets.

“You buy one for 10 yuan, what if you win?” At noon on September 9, Xu Baihua stood alone beside three counters and said to passers-by. This “just in case” drives young people who are “chasing their dreams” to open the payment code, and it also becomes Xu Baihua’s hope for a rainy day.

Around the same time, Wang Qian, who opened a convenience store, also wanted to make more money. She applied for a small welfare lottery machine, entered some scratch-off tickets, and started a side business in the store. When the market is good, you can sell 3-5 thousand yuan a day. In most cases, the daily turnover is less than 1,000 yuan. But Wang Qian feels that she doesn’t rely on lottery tickets to make a living, and the machine is just to increase her income.

Inside and outside the door, lottery players and practitioners alike are waiting for happiness to knock on the door.

02 Profit and loss, “a gamble”

Since opening the store, Wang Kai has not saved much money, let alone repaid the start-up money borrowed from his parents. Opening a lottery shop is like a “gamble”. Practitioners must constantly get good cards in order to return from the card table with a full load.

Wang Kai did some calculations and after investing 60,000 yuan in machine deposits, decoration, water and electricity, there was not much left. The monthly income is less than 6,000, and the rent is 2,000. The rest of the money is used as working capital to purchase goods as soon as it comes into the pocket. After a few months, he was losing money.

He originally wanted to earn 8,000-10,000 yuan a month. Based on this calculation, his monthly turnover will reach 130,000 yuan, which is about 4,300 yuan per day. The unit price per customer is 20-30 yuan, and at least 150-200 people will consume in a day. But in fact, only a hundred lottery players come to the store every day.

Thinking about it now, he felt that he played the wrong card on the first card.

The low sales agency fee model of lottery stores is destined to rely on the “volume-based” high customer flow, but this situation has extremely high requirements for the venue.

In order to save rent, Wang Kai took over a relative’s store. It was only after I opened the store that I realized, “It’s only 10 square meters, and four or five people can be crowded in one stop.”

There are two types of people who buy lottery tickets. One is the old lottery players who specialize in buying sports lottery tickets, ranging in age from 30 to 60 years old. Most of them spend in the range of 50 to 200 yuan. Most of them will stay in the store for half an hour to study the results of the previous draw. , and then place your bet. Another group of people focus on scratch-off games. Since it is “scratch-off”, it means that there needs to be room for operation.

Wang Kai discovered this problem a week after the business opened, and the urban management officials would cause trouble when expanding the business. He had no choice but to set up a low table 30 centimeters high in the store and put two plastic stools on it to serve as a simple scratching table. Although the problem of scratching prizes was solved, Wang Kai also knew that such a user experience was very poor – he saw people coming in and turning away after seeing the simple environment.

Most of the time, Wang Kai is idle. Sports lottery centers have prescribed business hours, and shop owners must be open for 8 hours a day, otherwise they will be warned or disqualified from selling lottery tickets.

Don’t care about sentimentality. Wang Kai still has the second and third hurdles to pass – grabbing tickets, which he didn’t know before entering the industry.

Scratch-off tickets, which are popular and have a high chance of winning, are already sold out by major stores every time you place an order. He has always wanted to grab a 10-yuan scratch-off ticket. The low unit price is the best way to retain customers. Customers who are “excited” by scratch-off tickets can stay in the store for a longer time, which brings considerable revenue.

The actual situation is that the only scratch tickets Wang Kai can grab are in face values ​​of 20 yuan, 30 yuan and 50 yuan. One week in August, when he was purchasing goods, he found that only the 30 yuan and 50 yuan varieties were left, so he had no choice but to place an order. If he really couldn’t get it, he asked his peers to buy it, either at the original price or at an additional price of 10 cents. He tried both.

Grabbing ticket sources is closely related to the business of lottery stores.

Once a prize of more than 5,000 yuan is scraped off in the store, the shop owner will hang the redeemed tickets on the wall to attract customers. This trick is indeed useful. Lin Chunshu remembers that his store won a grand prize of 50,000 yuan in 2019, and he suddenly became famous in the surrounding area, and his business doubled.

Watching the sparsely populated shop, Wang Kai felt a little frustrated.

Although Xu Baihua’s income in the shopping mall is not as good as Wang Kai’s, he doesn’t have to worry about it. Moreover, the ticket volume of the automatic ticket vending machine does not limit the number of scratch tickets purchased. For example, tickets with a low unit price of 5 yuan or 10 yuan can be replenished if they are out of stock.

Having been involved in the lottery industry for nearly a year, Xu Baihua’s monthly profit is about 1,000-2,000 yuan.

So does Wang Qian. After the welfare lottery machine is installed, the monthly income can be increased by about 500-1,000 yuan. Another advantage is that the welfare lottery can also drive business in convenience stores. She did it tepidly for almost a year.

03 The essence is still a public welfare industry

After the Spring Festival in 2023, Ms. Li opened a 100-square-meter lottery shop near Linping Commercial Street in Hangzhou, selling lottery tickets from both sports lottery and welfare lottery organizations.

Before joining the industry, she only heard from relatives that the lottery business was easy to do, and she could earn more than 30,000 yuan a month if she found the right place. She has her own job, but her husband, who resigned last year, is at home. Miss Li thought, anyway, the store rent is 40,000 yuan a year, and including decoration and equipment purchase, the total can be controlled within 150,000 yuan.

She was looking for something to do for her husband, but she didn’t expect that a small lottery shop could have such a high turnover. In the first month, her gross profit reached more than 20,000 yuan, which was more than most office workers after rent. It was hard for her to imagine how any store (lottery store) could not survive in this booming lottery market.

“In the final analysis, this business is not as profitable as imagined,” said an industry insider. “The essence of lottery is a public welfare industry.”

Li Li, a staff member at a sports lottery center in a first-tier city, said that the distribution of benefits in the hundreds of billions-level lottery market is intricate.

Broken down, the bonus pool proportion of the entire sales revenue is: 50%-60%. The second piece of income is used for distribution. In short, it is the business fee for developing the lottery system and printing and the sales agency fee of the outlets, accounting for about 13%-15%. The third part is the public welfare fund. Sports lottery is used for investment in sports undertakings, and welfare lottery is used for public welfare undertakings, accounting for 30%-35% (local and central governments each account for half).

For practitioners such as Wang Kai, the profit point is 7%-8% of the issuance fee.

Li Li said that in actual operations, practitioners often choose instant products such as scratch-off tickets. According to the data they have seen before, scratch tickets account for about 20% of lottery tickets. In other words, if practitioners and lottery players make individual bets, it will not be easy to make profits through lottery stores. A relatively reasonable approach is to combine scratch-off lotteries with lotteries and quizzes to bring in better returns.

She also said that the lottery itself is mainly for public welfare, and the application for opening ticket sales points is also to create better job opportunities. She revealed that around 2018, there were city-wide store opening targets, which required nearly 30,000 new store sales channels a year.

The number of lottery shops is indeed increasing. According to a report by Tianjin Daily on June 20, 2020, there are more than 300 convenience stores in Tianjin, of which more than 200 have provided lottery services.

Today, three years later, lottery shops have taken root in Tianjin and across the country. Tianyancha data shows that there are more than 21,000 lottery sales-related companies in my country. From the perspective of geographical distribution, Guangdong, Hunan and Hubei rank at the forefront in terms of the number of related enterprises, with more than 1,850, 1,540 and 1,120 companies respectively.

The more stores that can be added, it means increased competition for practitioners.

Ms. Li’s approach is to combine lottery stores and Internet thinking – to create private domain traffic. Her husband is a die-hard Messi fan and hangs out with various local fan groups all year round. After opening a lottery shop, he would take the initiative to post relevant game news in the group, adding by the way: Do you want to come to my store to watch the game?

She put a TV in the store and occasionally invited everyone to watch football together. In Ms. Li’s store, scratch-off games are not the focus, but the focus. “There are so many different types of betting in sports betting, and it’s really about winning and losing. A ‘real’ fan spends an average of 2,000-3,000 yuan a month on lottery tickets.”

04 Stick to it or leave?

Some colleagues around Wang Kai told him that if he stays for a few more years, by the time of the World Cup, he can earn several years of money in one month. He doesn’t know if he can survive until the next World Cup. “I don’t even dare to think about 2026,” he said.

It is difficult to make a profit, and some lottery shop owners have resorted to “psychological warfare.”

On social media, a lottery shop owner posted a handwritten poster at the door of his shop: No matter how busy you are at work, don’t forget to buy lottery tickets. “After all, it is much harder for you to earn 10 million than it is for you to win 10 million.” There are also store owners who combine lottery with retail industries such as coffee and milk tea, hoping to attract customers through mutual integration.

A lottery shop owner in Tianjin believes that when the economy goes down, the lottery industry will enter a period of rapid development, and what the shop owner needs to do is to use the “small cost and big profit” method to open up the consumer’s threshold.

Ms. Li posted the transfer notice of the lottery shop on August 27. She was pregnant with her second child and felt that her energy was limited, so she had to put down her profitable store. An account was clearly displayed in front of her. The initial renovation cost was 80,000 yuan, the machinery and deposit were close to 30,000 yuan, and the rent was 40,000 yuan. She thought about charging a transfer fee of 200,000 yuan so that she could recoup her capital.

Half a month has passed, and Ms. Li’s shop has not yet been sold.

Lin Chunshu still lives his own small life. Over the years, he has been accustomed to meeting all kinds of lottery players and shop owners, and he has long recognized one thing – “getting rich overnight” is just a dream, both for shop owners and lottery players. As for the numbers displayed by the lottery industry, Lin Chunshu feels that they have little to do with him.

“When business is good, I’ll do more, and when business is bad, I’ll take a rest.”

In the other corner of the camera, heavy data shows that practitioners are still on the way to enter the game. In the “Per Capita Lottery Purchase in Various Regions” statistics compiled by the media, Tianjin ranked first with 273 yuan. According to data released by the Tianjin Welfare Lottery official website, 65 and 62 additional lottery sales points were opened in Tianjin in July and August 2023 respectively. September is not yet over, and 48 new stores are ready for launch.

The lottery industry is still booming. In this fiery narrative, some people are frustrated and some are proud.

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