Vietnam’s government has tightened financial rules for lottery businesses with a new decree that reshapes how revenues, expenses, and profits are managed.
The decree clarifies which revenues count toward lottery operations, including proceeds from ticket sales, financial investments, and—critically—unclaimed jackpots. For computerized lotteries, if winners fail to collect prizes within the legal timeframe, the funds can now be reclassified as revenue. This change directly affects Vietlott, which handles the majority of Vietnam’s digital lottery sales.
Expenses Now Strictly Defined
Lottery businesses must account for expenses, including commissions paid to agents. Agent commissions-calculated as a percentage of ticket sales-are capped by the Ministry of Finance, though the exact rates haven’t been published yet.
For traditional lotteries issued under regional joint-issuance agreements, costs like venue rentals and equipment are now split among participating businesses based on their share of ticket sales. The decree also sets remuneration for Lottery Oversight Councils, which must be approved by provincial governments and paid according to workload.
A Reserve Fund with New Limits
The decree introduces stricter controls over the prize payment risk reserve fund, a financial cushion lottery businesses set aside to cover unexpected prize payouts. Previously, Vietlott and Southern region operators could hold up to 2% of tax-inclusive revenue in this fund, while other businesses could keep 10%. Under the new rules, the 2% cap applies to all computerized lottery products, while traditional lotteries face the 10% limit-but only if they use a fixed prize payout method.
Businesses must now calculate their reserve fund based on a formula: the fund’s size equals their total tax-inclusive revenue multiplied by their planned prize payout ratio, minus actual prizes paid out. If the actual payout ratio exceeds the planned rate, the reserve covers the difference. Any unused balance rolls over to the next year.
Lottery businesses also face new restrictions on how profits are used. They cannot allocate after-tax earnings to development funds. Outside investments are now limited to activities directly tied to lottery operations.
The decree takes effect on December 8, 2026, and replaces Decree 122/2017/ND-CP. Provincial governments will oversee compliance, while the Ministry of Finance retains authority over financial reporting guidelines and Vietlott’s ownership role.
The decree also provides that lottery businesses may allocate funds to combat illegal gambling tied to lottery results and counterfeit ticket production. These expenses must align with the financial capacity of each operator and be paid only after public security agencies provide documented evidence of violations-such as court judgments or administrative penalty receipts. The Ministry of Finance will set specific support rates, which lottery businesses must then propose to their owner-representing agencies for approval.
Lottery businesses must now account for costs related to printing tickets, including production, transportation, storage, and legal surcharges. For computerized lotteries, expenses for playslips, paper, ink, and other materials must reflect actual supplier contracts. If businesses print tickets in-house, costs are valid only if deemed reasonable. Additionally, expenses for publicizing draw results-through media or printed materials-must be justified by invoices and comply with tax laws. Contributions to Regional Lottery Councils, which manage joint-issuance agreements, are now subject to Ministry of Finance rates and require approval from council chairpersons.
Profit and Investment Restrictions
Under the new rules, lottery businesses fully funded by state capital cannot allocate after-tax profits to development investments. Profits may only be used for operational needs. Any bonuses or additional support for agents exceeding legal caps are prohibited.
Financial Requirements for Regional Lottery Council Operations
The decree establishes specific financial obligations for contributions to Regional Lottery Councils, which oversee provincial lottery activities. The Ministry of Finance will determine the contribution rate for these councils, ensuring that funding is allocated based on operational needs. All expenditures must be supported by valid invoices and approved by the councils themselves, with chairpersons responsible for verifying compliance with financial regulations.
Implementation and Compliance
Provincial People’s Committees will supervise lottery businesses’ adherence to the decree, conducting inspections and audits as needed. For businesses with reserve fund balances exceeding the new 2% or 10% caps, excess amounts must be reclassified as revenue by December 31, 2026, with corporate income tax applied.
