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Wednesday, Oct 18, 2006
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Probe confirms lottery racket: Isaac

Special Correspondent

State to pursue recovery of tax dues from online lotteries

THIRUVANANTHAPURAM: A Vigilance probe into the operations of paper lotteries of other States in Kerala has confirmed the allegations of large-scale irregularities, Finance Minister T.M. Thomas Isaac told the State Assembly on Tuesday.

Replying to discussions on a motion for referring the Kerala Finance Bill, 2006 to the Subject Committee of the House, Dr. Isaac said the Vigilance had unearthed clear evidence to show that the paper lotteries of Sikkim and Bhutan Governments were flouting Section 4 of the Central Act governing lotteries.

Agencies assigned by these Governments were printing and selling the tickets of these lotteries in Kerala. This was against the provision in the law which insisted that the tickets should be printed by the Government concerned.

He said the Sikkim and Bhutan lotteries were having a daily sales turnover of more than Rs.22.5 crore in Kerala. The sales proceeds were not being remitted in the treasury, but were going to the pockets of the distributors.

These lotteries were also flouting the provision that the frequency of the draw should be restricted to once a week to guard against their addictive nature. Bhutan lotteries usually went for 14 draws a week under different labels, while the Sikkim lotteries were conducting as many as 28 draws a week under 18 labels.

No advance tax

Dr. Isaac said several issues had to be sorted out before the State Government could act against these lotteries. Several cases were pending in the Supreme Court and the High Court. The Government would present before the courts the evidence gathered by the Vigilance. In the meantime, the Government had decided not to collect advance tax from the lottery operators [thereby legitimising their irregular operations].

Referring to the dispute over uncollected tax dues from online lotteries [now banned in the State], he said that under one option of levying the tax, the lottery operators had run up a tax arrears of more than Rs.7,000 crore. [This option is based on the number of draws, while the lottery operators have another option of paying tax based on their actual turnover.]

Dr. Isaac said the Government would pursue the matter of recovering the dues. He said he could not at this point give an estimation of the amount the Government could recover from them.

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