The government is set to revise the lottery system for the first time since the introduction of the 'Lottery and Lottery Fund Act' in 2004. The changes will allow for differential distribution of lottery funds based on the performance of various agencies, as well as adjustments to the distribution ratio of lottery revenues.
According to the Lottery Commission under the Ministry of Economy and Finance, the 'Partial Amendment to the Lottery and Lottery Fund Act' was approved at a Cabinet meeting on August 18. The Lottery Act was established in 2004 to unify the lottery issuance system. Previously, 35% of lottery revenues were mandatorily allocated to existing issuing agencies to compensate for their earnings.
This year, the scale of fund projects is set at 3.4028 trillion won, a 5.5% increase from the previous year. The government has been operating this fund by dividing it into statutory distribution projects and public interest projects.
However, there have been ongoing criticisms from the National Assembly and the Board of Audit and Inspection regarding the inability to reflect changes in the financial conditions of agencies over the past 20 years, which has hindered the efficiency of financial operations.
In response, the Lottery Commission developed a revision proposal based on the 'Lottery Fund Statutory Distribution System Reform Plan' approved at a full meeting in February, following consultations with relevant agencies and legislative announcements.
To enhance the flexibility of lottery fund distribution and improve operational efficiency, eight of the ten statutory distribution agencies will transition their projects to public interest initiatives. The projects being transitioned include the Science and Technology Promotion Fund, the National Sports Promotion Fund, the Labor Welfare Promotion Fund, the Small and Medium Enterprise Start-up and Promotion Fund, the National Heritage Protection Fund, the Community Chest of Korea, the Forest Environment Function Enhancement Fund, and the Korea Veterans Welfare Medical Corporation.
The distribution of lottery revenues to local governments and Jeju Island will maintain the current system, as it was originally intended to be a self-generated revenue source, according to the Lottery Commission.
Additionally, from 2028 to 2030, the distribution ratio of lottery revenues will gradually change from the current fixed 35% to within 35%. The range of distribution adjustments based on performance evaluations will be expanded from the current 20% to a temporary allowance of 40%. This means that agencies could receive up to 40% more based on their performance evaluations.
A Lottery Commission official stated, "This revision is the first major overhaul since the introduction of the Lottery Act in 2004, and it can be seen as a way for each agency to secure budgets through performance in a fully competitive market. The amendments will enhance the efficiency of fund distribution."
* This article has been translated by AI.
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