LOTTERY SCAM

A lottery Scam seems to be operating in the country. The OUTLOOK Weekly Magazine has exposed the existence of this ‘Fraud’ in an article in its issue dated 15th No. 2004. We have brought it to the notice of the Union Ministry of Home Affairs vide our letter dated 9th No. 2004 with the request that Govt. of India should take concrete steps to see how this serious malaise can be checked. A copy of the letter has also been sent to the Comptroller & Auditor General of India who is reported to have examined this matter in Karnatka during 2002-03. He has been requested to provide us any material which may have been collected by them. 

Excerpts from the ‘article’ are reproduced below for the benefit of our readers:-

For an industry worth Rs. 50,000 crore, with its tentacles spread across 13 states, the lottery trade doesn’t attract as much attention as it should from law-enforcing agencies. Operating mostly out of the relatively inaccessible states of the Northeast, it is one of the least regulated businesses of the country. The Comptroller and Auditor General of India (CAG) has repeatedly pulled up these state run lotteries but business goes on as usual. And though you can’t put a figure to the scam in the trade, just totting up figures the CAG has quoted over the last decade gives you an idea of the loss of thousands of crorers to the exchequer. Going strictly by the law, only stage governments can run lotteries. But with sole distributing and marketing agents, various governments have virtually handed over the business to private players. With no independent account of tickets sold or verification of prize-winners, illegalities like altering the prize-winning ticket number, pocketing prize money ticket number, pocketing prize money, sale of fade tickets, printing o excess tickets, under-reporting of profits or distribution of prizes to fictitious winners get reported officially all the time. Action is never taken.

There is no age or class barrier to the gambling urge. That hope of making millions sees some invest their life earnings and lose it all. Cases of suicides are not uncommon. And technology is making it only easier to get that ticket. One could opt for the online state-run lotteries, where you only have to go to a networked kiosk, pay up and get a receipt which will serve as your ticket. Or you can log on to the Net ad buy a ticket there, a completely unregulated sector. So, even if Delhi has banned lottery, the Internet provides an alternative gambling route. 

Much of the corruption in this trade would not have been possible were laws followed closely. Strictly speaking, tickets even for online lotteries have to be printed by the government, and the draw verified by it. Draws in fact have to be on a weekly basis and there shouldn’t be any single-digit lotteries. But as the Kerala Government reported to the Centre in August, 2004, rules are violated with impunity. Single-digit lotteries are in place, operators print tickets, draws are conducted by distributors or their agents, “reducing the state government to the role of a mere witness”. As many as 70 to 100 draws are held every day instead of a weekly draw, “converting retail outlets into gambling dents”, the state government getting less than five per cent out of the sale proceeds instead of a 50-50 profit-sharing arrangement. The taxes secretary of the Kerala government had written to the Union home ministry in January 2004 spelling out the extent of the scam. “About 15 lakhs persons in the state participating in these lotteries are being cheated every day, since the safeguards prescribed by the Lotteries (Regulation Act) 1998 were flouted.” The wrote. 

Kerala and Punjab have periodically acted against lottery agents. But with thousands of crores stake, lottery operators hire the best legal brains to keep their business running. This could be the only state-controlled business that has repeatedly been found dubious by the CAG. But the All India Federation of Lottery Trade and Allied Industries (AIFLTAI) in a representation to home minister Shivraj Patil on October 27 complained of harassment by state governments and sought amendment to the central law. 

In fact, in a first-ever review of the online lottery business, the CAG’s 2004 report indicated the Karnataka government. It revealed that the state government had no clue about the lottery business done under its authority, under its logo and imprint, with the signature of the head of finance department. In Manipur, according to the CAG, Rs. 1,662.79 crore representing government profits was retained by the distributors” the distributors “reaped an additional benefit of Rs. 127.10 crore by pricing each ticket in excess of the tendered rate”. So while dreams of plenty turn into nightmares of penury for many. These dream-peddlers remain perennially lucky, the law-makers firmly on their side.

November 04 (Special Issue)