Lottery price is constant different from common commodity. The prices system of lottery is established to analyze the supply and demand functions of lottery, including sell price, expected value and valid price.  Supply and demand functions of lottery are founded when considering the valid price. According to the expected value theory of statistics, the expected value of lottery was calculated. The supply function is gained, which is characterized from descending to ascending. The demand function of lottery is obtained by regression analysis, which represents descending. Chinese Double-color lottery market was empirically researched. Their supplies function and demand function were estimated. The equilibrium analysis and elasticity analysis of lottery market were made. The strategy of developing Chinese lottery industry is also proposed. 