Lao is definitely rough for Raiden to beat. But this match is still not as bad as say Reptile vs Mileena or Cage vs Kang.
RAIDEN
Be watching for Lao to whirlwind spin. He probably will often because there is nothing Raiden can do to him while he's spinning other than throw a lightning bolt. Instant superman from crouch to surprise Lao. Try to throw Lao off by mixing in teleports and trying to apply jab. If you're in close and looking to attack, Lao will rarely get the spin started in time to hit you. Shock is a good weapon but don't use it too often or it's bad news. Watch for any Lao teleports and punish with uppercuts.
LAO
It seems Lao has all the perfect counters in this match. When Raiden jumps, jump punch/dive kick him. Throw hats to get Raiden jumping/teleporting, then whirlwind spin. Up close, Lao has the advantage with the much faster (though shorter) sweep, headbutt, and nice punches. Pin Raiden in a corner to really take his options away. Teleport and dive kick to make it hard for Raiden to track you down. Let him come to you, and then have the whirlwind spin ready. Anticipate Raiden's lightning bolts and do a quick dive kick, or teleport.
Raiden can give any fighter trouble, but Lao definitely has his number if played correctly.
7-3 for Lao.