South Korea to Revise Lottery Fund Distribution, Linking Payouts to Performance

South Korea is set to overhaul its lottery fund distribution system, a policy that has been in place for nearly two decades. The mandatory allocation of 35% of lottery revenue to 10 institutions, established in 2004 to support existing lottery operators, will be significantly altered.

Under the revised 'Lottery and Lottery Fund Act,' the mandatory distribution to eight of these institutions will be eliminated. The government aims to transition these projects to public service initiatives. This change means that future funding will not be automatically guaranteed but will instead be determined by project demand and performance evaluations.

The reform, approved in a recent cabinet meeting, addresses long-standing criticisms that the fixed allocation ratio failed to reflect the changing financial needs and demands of the institutions. By linking funding to performance, the government seeks to improve the efficiency of the lottery fund and ensure resources are allocated more effectively to impactful projects. The new system is expected to be implemented starting in 2028.