This article analyzes the institution obstacles that hinder the development of China's lottery industry. We find there are several factors such as the trend of department operation, the unclear relationship of property right and operation right, the insufficiency of supervision and the lack of professional laws and regulations. The results of the research indicate: we should reform the recent operation and management system of China's lottery industry. We also have to increase the strength of supervision for it . Moreover, we have to set up and complete the laws and regulations relating to the lottery industry. Only in this way can we ensure its long-term and steady development.