Police say a lottery manager in Xian has confessed to colluding with about six people to cheat in lotteries run by the state last March.
Yang Yongming admitted while in police custody that he had teamed up with the others to try to beat a lottery system which was open for him to rig.
According to an investigative report by China Central Television, Yang had signed contracts with the lottery authorities, promising to deliver 33 million yuan in ticket sales in two years in cities including Xian, Weinan and Yanan , in return for a share of the sales revenue.
Lotteries on the mainland are mostly run by sports departments of local governments. To attract large numbers of punters, organisers often build special sales outlets at public venues such as shopping centres, with these sales promotions often contracted out to locals, who are well connected.
Yang's contracts made him the principal agent in charge of all ticket sales in the cities he operated in and allowed him unsupervised access to the lottery drawing process.
According to the CCTV report, four people claimed in late March that they had won but only one was genuine.