The Hindu : Kerala News : State urges Centre to ban online lotteries

Online edition of India's National Newspaper
Saturday, Aug 28, 2004

Kerala

Kerala

State urges Centre to ban online lotteries

By P. Venugopal

THIRUVANANTHAPURAM, AUG. 27. The State Government has yet again asked the Centre to prohibit, within the territory of the State, the lotteries of other States for violating the provisions of the Lotteries (Regulation) Act of 1998.

The Taxes Secretary to the State Government, Sajen Peter, has sent a letter to Joint Secretary for Centre-State Relations under the Union Ministry of Home Affairs, A. K. Srivastava, on August 23, listing several instances of `continuing violations' of the Act by the online lotteries of some of the North-Eastern States and Bhutan in the State.

Meeting

In January this year, the State had brought to the attention of the Union Government the `irregularities' being practiced by these online lotteries.

Following this, the Union Government convened a meeting of the representatives of the Governments of the concerned States for discussing the objections raised by Kerala.

At this meeting, these States were asked to furnish written replies to the charges against their lotteries and their replies are now with the Kerala Government.

Referring to the responses from the lottery operating States, Mr. Sajen Peter told Mr. Srivastava that the clarifications offered by them were by no means acceptable to Kerala. He said that, even as Kerala's representation was being processed by the Union Government, ``innumerable new schemes of lotteries, each of them openly violating the provisions of section 4 of the Lotteries (Regulation) Act, have been introduced by the other States in Kerala".

`Gambling'

In his letter, Mr. Peter says that the wholesale distributors and marketing agents of these States, who are the real operators of these lotteries, have come out with new methods to circumvent the precautionary conditions of the Act.

"These lotteries have deteriorated to the level of ... gambling that cannot be considered as State-run lotteries envisaged under the Act," the letter says.

The Act mandates that "no prize shall be offered on the basis of a single digit". Mr. Peter notes that the Parliament, while framing the Act, had considered a winning probability of one-in-ten as the optimum permissible `non-addictive' limit of the chances of winning a prize.

"All States in whose names lotteries are sold in Kerala have schemes where prizes are directly offered on the basis of single digit or where the probability of winning is higher than one-in-ten, sometimes as high as one-in-two. This is the reason for increasing addiction among participants that leads to chronic indebtedness and even suicides," the letter says.

Rules violated

The letter further notes that the Act permits only the State Governments to print lottery tickets.

However, in the case of these online lotteries, the printing of tickets, as well as the marketing, is done by the private sector. Some of the companies in this business print and sell lottery tickets on behalf of more than one State at the same time.

"Not even a single State (operating these lotteries) could provide documentary evidence to establish that the retailer, who prints and sells the lottery tickets... has been properly and legally delegated the responsibility to print tickets, if at all such responsibility could be delegated to private individuals," the letter says.

The retailers of these lotteries even "design and implement the lottery schemes, provide the infrastructure and the technology, print tickets and conduct draws".

The letter recounts several other legally objectionable aspects of the conduct of the online lotteries. One of these aspects relates to the number of draws these lottery operators conduct each week. While the Act mandates that no lottery shall have more than one draw in a week, "all States on whose behalf lotteries are sold in the State have as many as 70 to 100 draws ... every day... . Since the draws are conducted every two to five minutes, these lotteries have an instantaneous character converting the retail outlets into gambling dens where participants can try out their luck on a continuous basis from early morning to late night," the letter says.

Suicides

"Over the last eight months alone... more than 15 instances of suicides have been reported from all over the State... directly linked to indebtedness connected with lottery addiction," the letter adds.

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