"Alibaba's Taobao marketplace is the largest player in terms of selling online lottery tickets in China, but Tencent has clearly made a lot of effort to sell lottery tickets through mobile devices," said Li.

Li added that Alibaba has its unique advantage by owning China's largest customer-to-customer online platform Taobao, but Tencent has integrated lottery sales functions on many of its smartphone apps, including messaging app WeChat.

According to Analysys International, Taobao Lottery, the leading player, had 11.3 percent of China's online lottery market in the first quarter. Tencent accounted for 4.5 percent, becoming the fourth-largest player in online lottery sales in the same quarter.

Online lotteries accounted for roughly 10 percent of the total lottery sales market in China, said Li, adding that online lotteries usually take more than 30 percent of overall lottery sales in developed countries.

Tencent also wants a bigger market in mobile payments, said Lu Jingyu, who covers the mobile Internet sector at iResearch Consulting Group.

Mobile payments are seen as a critical component for the monetization and ecosystem building for both Alibaba and Tencent. "Alipay enjoys a dominant position in mobile payments as Alibaba builds its empire upon e-commerce, and people are used to spending money in its system," Lu said.

"However, Tencent has made a tremendous effort to develop consumers' habit of spending money in its system, including encouraging people to place their bets and pay for their sports lottery through WeChat," she said.

In the updated version of WeChat, which was released on Monday, Tencent added many new payment features. The "my wallet" feature allows people to transfer money to other people's accounts, and it also allows people to deposit some cash into their individual WeChat accounts, which means WeChat's wallet is getting increasingly similar to Alipay Wallet, the app of Alipay.

"It would not take a genius to find out Tencent's ambition in mobile payment," said Lu.

China's lottery sales rise 10%	Online lottery firm bets onmobile Internet