The expansion of illicit lottery activities has caused significant harm to both agricultural production and the livelihood of rural residents. An analysis of the factors that influence rural residents' participation in underground lotteries can provide crucial insight for regulating the lottery industry's development. This study examines the present state of rural residents' participation in underground lotteries, investigates the factors that impact their participation using the Double-Hurdle model, and further employs the ISM model to evaluate the correlations and hierarchical structure among the factors, using field survey data collected from 603 rural residents in S Province, China. The findings reveal that 53.07% of the respondents have participated in underground lotteries. Risk preference, information acquisition, social networks, age, education, family burden, percentage of agricultural labor, agricultural business scale, and household income significantly affect whether residents purchase lotteries (WPL). All factors, except the percentage of agricultural labor and agricultural business scale, also significantly impact underground lottery spending (LS). Among the significant influencing factors, rural residents' risk preference is the direct surface factor, whereas agricultural business scale, household income, information acquisition, and social networks are the middle indirect factors, and residents' age, education, family burden, and percentage of agricultural labor are the deep-rooted factors. It is recommended to regulate the lottery industry's development can be achieved by enhancing entertainment and cultural activities, expanding economic opportunities, enhancing rural education, increasing law awareness, and improving the public welfare lottery business model. The conclusions offer a valuable reference point for the standardized development of the lottery industry and the promotion of social stability in rural areas.
