The Hindu : Crackdown on online lottery retailers planned

Online edition of India's National Newspaper
Tuesday, Feb 03, 2004

Kerala

Kerala

Crackdown on online lottery retailers planned

By C. Maya

THIRUVANANTHAPURAM, JAN. 2. The State Government is contemplating serious action, including pressing criminal charges, against the promoters or retailers of online and paper lotteries of other States that are being organised here in violation of the Central Lotteries (Regulation) Act.

Selling or distributing the tickets of lotteries that are functioning in violation of the provisions of the Central Lotteries (Regulation) Act is a "cognisable and non-bailable offence" under Section 8 of the Act. Hence, the "Station House Officers can arrest offenders and register FIRs without any complaint in this regard", it was suggested at a special meeting of the District Collectors held here on January 30.

Arrest and other action under Section 8, which shall be taken by the Station House Officers, will be coordinated by the District Collectors at district levels. Copies of the letter written by the Taxes Secretary to the Union Home Secretary, the Central Act, the interim order of the High Court's Division Bench and the counter affidavits filed by the Government would be distributed among the Collectors, District Superintendents of Police and the Commissioners of Police, who are the designated enforcement agencies under the State Lotteries Rules.

The meeting, chaired by the Chief Minister, was attended by the Finance and Revenue Ministers, Chief Secretary, Taxes Secretary and other senior officials.

The State Government is also learnt to be contemplating stringent action against retailers as a follow-up to its urgent letter to the Centre, demanding that Section 6 of the Lotteries Act be invoked and that "urgent action" be taken under Section 7(3) of the Act.

The Taxes Secretary suggested at the meeting that only these steps "will establish the State's seriousness and sense of urgency, considering that more than 15 lakh people are being cheated and defrauded on a minute-to-minute basis".

It has been estimated that Rs. 6,000-crore worth lottery tickets are sold in the State every year, out of which only Rs. 100 crores worth tickets were those of the Kerala State Lotteries. Operators of illegal lotteries, including online lotteries being organised in the name of other States, were siphoning off the rest, which is a massive drain on the State's funds, the Taxes Secretary has pointed out.

Many of these illegal lotteries have characteristics of highly addictive `instant-lotteries' and `single-digit' lotteries and the racket had assumed the dimensions of a serious social evil, with several reported cases of suicides, he pointed out.

The validity of the Kerala State Lotteries and On-line Lotteries (Regulation) Rules had been challenged by other States and online lotteries' operators in the High Court. In its interim order on December 19, 2003, the Division Bench, while restraining the State Government from enforcing the provisions in the State Rules, had made it clear that its order "will not prevent competent authorities from taking any action against the online lotteries operators or their agents under the provisions of any other law".

Under the Central Lotteries (Regulation) Act, Section 6 allows the Centre to ban all lotteries functioning in violation of the Act, while Section 7 says that any person, acting as an agent or trader, who sells or distributes the tickets of any lottery organised in violation of the Lotteries Act shall be punishable "with rigorous imprisonment, for a term which may extend to two years with fine or with both".

Also, according to Section 8 of the Act, "the offence under this Act shall be cognizable and non-bailable".

The State Government has thus taken the stand that the HC interim order only restrains it from enforcing the State Rules but that it was free to seek all remedial measures under the Central Act to move against fraudulent lotteries operating in the State.

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