Corrupt officials embezzled or misused over RMB 16.9b (US $2.8b) from China’s state-run lottery operations in less than three years, according to a report by the country’s top auditor.

In November 2014, the National Audit Office (NAO) announced it had sent inspection teams to 18 Chinese provinces to determine how lottery administration centers were using the funds raised by the welfare and sports lotteries. On Thursday, the NAO reported that 18% of the government’s share of lottery revenue generated between Jan. 2012 and October 2014 had been improperly allocated.

The NAO said more than one-quarter of the RMB 65.8b in lottery funds it reviewed was “problematic.” State news agency Xinhua reported that this included embezzlement, fraud, illegal subsidies for staff, procurement of ‘fancy’ offices and unauthorized online lottery sales. China ‘temporarily’ suspended online lottery sales on March 1, which took a serious toll on approved online operators such as Shenzhen-based 500.com.

Seventeen of the provinces audited were found to have engaged in online lottery sales without the Ministry of Finance’s approval. The MOF has never explicitly licensed any online operators, although 500.com and China SMG network were approved to take part in an online sales pilot program.