An electronic display advertises the Powerball lottery jackpot in the Manhattan borough of New York City, in this picture taken January 12, 2016.[Photo/Agencies]

"If the agency claimed the lottery was bought for itself instead of Chinese buyers, it would be extremely difficult for buyers in China to submit solid evidence" to the contrary, said Cheng.

Su called on authorities to provide warnings regarding such situations.

"Many just follow the trend and don't know the potential risk," said Su. "With money transfers becoming more convenient on mobile devices, many people could find different ways to participate in illegal lottery activities, which could involve a great amount of money."

"This calls for government regulations to reflect the rapidly changing society," Su added.