“I wish to tell the government, invoke and challenge it, to explain to the nation the benefits to society from the lottery. I am ready to tell what is the harm to society from the lottery. Every woman from a poor family, every mother from a poor family, every sister from a poor family, will say that there is no worse enemy than the lottery. Since you have decided to encourage it, I am standing to oppose the same.”
That was how Prakash Javadekar of the Bharatiya Janata Party (BJP) wrapped up his speech (in Hindi) in Rajya Sabha on November 24, 2009, while speaking on a government-sponsored motion to repeal the Lotteries (Prohibition) Bill, 1999. The Bill, originally introduced by the Vajpayee government in Rajya Sabha on December 23, 1999, was later referred to a Department Related Parliamentary Standing Committee on Home Affairs. The Standing Committee, deliberating over the ensuing two years, could not reach any conclusion because of the opinion divide among the members and the views of the public. Rajya Sabha being a permanent house, the Bill did not lapse despite the exit of the Vajpayee government in May 2004. Its successor, the UPA government, decided to repeal the bill after waiting for five years.
One is reminded of the episode in the wake of the current revelation by the State Bank of India (SBI) in the electoral bond case. While many other parliamentarians had warned about the social consequences of the lottery, nobody perhaps anticipated its political dimensions before. The Chennai-based ‘Lottery King’ Santiago Martin appears as the biggest donor through electoral bonds. Between April 2019 and January 2024, his company Future Gaming and Hotel Services Pvt. Ltd purchased electoral bonds worth Rs 1,368 crore, which constituted around 11 per cent of total donations that political parties received through this route. However, he is shy about publicising this side of his philanthropy. About the rest like healthcare support, food relief, flood relief and educational help, he is quite forthcoming on the website of Martin Charitable Trust.
Under the latest revelations by the SBI, it appears that the All India Trinamool Congress (AITC), followed by the Dravida Munnetra Kazhagam (DMK) are the two biggest beneficiaries of Lottery King’s political funding by electoral bond route. Whereas the former received Rs 542 crore, the latter received Rs 503 crore from Future Gaming and Hotel Services Pvt. Ltd. The difference lies in the fact that whereas AITC rules West Bengal where lottery is permitted and thriving, the DMK rules Tamil Nadu where Martin resides but lottery is prohibited.
As per information shared by MoS (Home) Nityanand Rai on February 5, 2020, in Lok Sabha (Unstarred Question 392), there are four states viz. Arunachal Pradesh, Mizoram, Nagaland and Sikkim; and one autonomous region of Bodoland Territorial Council (BTC) which are organising online and paper lotteries. Four more states viz. Kerala, Maharashtra, Punjab and West Bengal are organising only paper lotteries. A GST of 12 per cent is levied on lotteries organised by the state, and 28 per cent on state-authorised private lotteries. The GST revenues from the lottery are an important source of revenue for the government. Noticeably, West Bengal is the biggest draw for the lottery business. It contributed a GST of Rs 2237.31 crore in the first two-quarters of FY2018-19. No other state came even anywhere near to it.
The subject matter of lotteries organised by the Government of India or the government of the state comes under Entry No. 40 of the Union List under the Seventh Schedule of the Constitution. On March 23, 2023, MoS (Finance) Pankaj Chaudhary informed the Lok Sabha (vide unstarred question 3190) that the Centre has no plans to limit the sale of state lotteries in the concerned states.
II
The curious thing is how the lotteries grew in India. In the 1950s, there were very few lotteries organised. The policy of the Centre was admittedly to discourage even those few. We know this from an interesting exchange between Nawab Singh Chauhan and Deputy Home Minister B.N. Datar occasioned by a starred question (No.628) in Rajya Sabha on September 12, 1956. The deputy home minister revealed that only one state viz. Jammu and Kashmir was organising a state lottery, and the Centre had requested them to discontinue the same. He further informed that only some bona fide institutions were allowed to conduct private lotteries in certain states, and that no state government received any funds from them. The Centre had requested the states even to stop this kind of private lotteries.
Around the 1960s, India’s economy began to stagnate. It was precisely around this time a few states like Haryana, Kerala, Madras (later Tamil Nadu), Punjab and Rajasthan were allowed to conduct lotteries to shore up their revenues. The MoS (Home) Vidya Charan Shukla admitted in Lok Sabha on November 22, 1968 (starred question 271) that a section of the intelligentsia had expressed resentment against this method of state governments to raise revenue.
The issue led to a heated exchange in Lok Sabha on August 29, 1969, occasioned by a starred question put by Mahant Digvijay Nath of Hindu Mahasabha. Nitiraj Singh Chaudhary observed that crosswords (on which there were prizes in those days) for which intelligence was required had been curbed by the government. By contrast, chit funds and lotteries, which depended merely upon chance, were being permitted. He called it gambling, pure and simple, to which the Centre had become a party. R.K. Birla of Swatantra Party felt that many poor people were falling victim to this form of gambling, as they preferred the lottery to work. MoS (Home) Vidya Charan Shukla declined to accept the lottery as gambling and described it as a means to raise revenues by the state. Sadly, Mahant Digvijay Nath, the head of Gorakhpur Mutt, who had raised this important issue in Lok Sabha, passed away within a month.
It was indeed an avalanche of ‘good luck’ that struck India by the turn of the 1970s! The MoS (Home) Ram Niwas Mirdha informed the Rajya Sabha (vide starred question 455) that the governments of Assam, Bihar, Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Maharashtra, Madhya Pradesh, Mysore (forerunner of Karnataka), Nagaland, Orissa (now Odisha), Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal had introduced lotteries in their states. This time the states were recognisably making profits from them. Those in the big league were Haryana (Rs 1.86 crore), Punjab (Rs 1.06 crore), Kerala (Rs 2.08 crore), Maharashtra (Rs 8.07 crore), Mysore (Rs 6.05 crore) and to top it all Tamil Nadu (Rs 10.40 crore).
The 1970s were indeed a stressful time for the Indian economy, as the decline had set in since 1966. The rapid strides of the Green Revolution notwithstanding, per capita income decreased in the early 1970s. The centralizing tendencies of the Indira government should be contextualised in this economic distress. Little wonder then that in the 1970s, the lottery became for common people what the stock market was to become in the early 1990s – a ticket to wealth (or at least an illusion of it).
It was then that Tamil Nadu set an example by deciding to stop the lottery business in 1975. The then Tamil Nadu Chief Minister M. Karunanidhi, on the advice of Jayaprakash Narayan, announced that he was discontinuing lotteries in the state. How do we know this? This was expressly stated by G. Lakshmanan, a member of the DMK party, in Rajya Sabha on January 16, 1976, while he was participating in the discussion on a private member’s bill introduced by Dwijendra Lal Sen Gupta (West Bengal) viz. Prevention of Lotteries Bill, 1971. However, it appears that the lottery staged a comeback in Tamil Nadu in subsequent years. It became a lucrative destination for the lottery before they were illegalized by J Jayalalitha in 2003.
Lottery tickets were on sale in Delhi in the 1980s. This columnist had seen in his childhood his father, who was a humble government employee, besides being a struggling author, often purchasing lottery tickets. Instead of prohibiting lotteries, the Centre on June 26, 1984, issued guidelines to the states on the conduct of lotteries. On August 24, 1984, Madhu Dandavate introduced as a private member legislation viz. Prevention of Lotteries Bill, 1983 in Lok Sabha. Describing lotteries as a ‘nationalisation of corruption’, Dandavate, former Finance Minister of India, claimed that police had unearthed a number of malpractices in the lottery business. All the lotteries were breeding grounds for gundas and anti-social elements.
However, 1984 was a tumultuous year marked by Operation Bluestar, the assassination of Prime Minister Indira Gandhi and the Bhopal gas leak etc. The issue of the lottery was at best secondary. Dandavate’s Private Member Bill remained pending at least for three years, as told by him when the issue of lottery came up in Lok Sabha again on March 6, 1987, occasioned by a starred question (No.143) put by Kamla Prasad Rawat. The debate revealed a new menace was on the rise – instant lottery. “Just like instant coffee”, Deputy Speaker of Lok Sabha exclaimed on hearing the term. P. Chidambaram, MoS (Home), informed the Centre was seized of the matter and written to states on January 30, 1987, not to allow instant lottery. Under the instructions, printing of all tickets should be done under the aegis of the state government, regardless of whether the lottery was state-owned or private.
III
In the early 1990s, the single-digit lottery had become a craze in Delhi. Tickets were sold even in the vicinity of the government offices. They were popular amongst the low-paid staff, some ready to put in their entire month’s earnings. There was an agitation led by Vijay Goel of the BJP to prohibit single-digit lottery. On May 17, 1997, a memorandum was submitted to the then Prime Minister I.K. Gujral by 124 members of Parliament cutting across party lines that a ban on lottery be placed by the Centre. Lottery, they maintained, was nothing but gambling. Single-digit lottery, they demanded, should be banned forthwith. Gujral government promulgated a Lotteries (Regulation) Ordinance, 1997 on October 1, 1997, that was re-promulgated on December 30, 1997.
Within a few months of Atal Bihari Vajpayee becoming the Prime Minister, the Lotteries (Regulation) Act, 1998 was enacted on July 7, 1998. It completely prohibited single-digit lottery in India besides imposing ten other conditions to stop malpractices in the lottery. These included conditions like the state government shall print the lottery tickets bearing imprints and the logo of the state in such a manner that the authenticity of the ticket is ensured; the state government shall itself conduct the draws of all lotteries; no lottery shall have more than one draw in a week; the number of bumper draws shall not be more than six in one calendar year etc. The state government was also empowered to prohibit the sale of tickets of lotteries organised or conducted by any other state. However, it was not until 2010 that rules under the statute were framed by the UPA government.
While the Lotteries (Regulation) Bill, 1998 was being examined by the Department Related Parliamentary Standing Committee on Home Affairs, the Committee strongly recommended the government to come forward with a comprehensive bill, at the earliest, in consultation with state governments and UT administrations for banning lottery trade completely. There was indeed a political consensus towards the end of the century on banning lottery trade. Thus when the matter was placed in the Conference of the Chief Ministers held on November 27, 1998, there was a general agreement in favour of banning the lottery.
This encouraged the Vajpayee government to introduce the Lotteries (Prohibition) Bill, 1999 in Rajya Sabha on December 23, 1999. However, the twist in the tale came when the bill was referred to the Department Related Parliamentary Standing Committee on Home Affairs. As the Committee ran a press advertisement in major English, Hindi and vernacular dailies all over the country between June 1 and 4, 2000, it found the reality to be sobering. The Committee received only nine representations in favour of the bill, of which seven were from anti-lottery activists. In sharp contrast, it received 53,892 representations against the bill which included 53,711 representations from individuals allegedly employed directly or indirectly in lottery trade or allied industry. It appears the government had taken the support of the political class for granted. Whereas only one Member of Parliament made representation supporting the proposed legislation, 26 made representations against it.
The internet began to proliferate in India in the mid-1990s. The lottery firms were quick to take advantage of this. As early as 1997, Punjab and Himachal Pradesh announced permitting online lotteries. In March 2002, the Maharashtra government entered into an agreement with Essel Group to promote E-cool Gaming Solutions Pvt Ltd to offer state lottery online for 10 years.
When the Lotteries (Prohibition) Bill, 1999 was being considered by the Department Related Parliamentary Standing Committee for Home Affairs, there were 13 states in India that were organising their own lotteries. Some of the states like Karnataka, Tamil Nadu and Haryana etc have officially fallen off the lottery map since then.
In 1999, West Bengal was ready to discontinue the lottery, as it informed the Standing Committee. West Bengal now appears to be the leading state in matters of lottery. There is little surprise if “Lottery King” Santiago Martin contributed to the party fund of All India Trinamool Congress, in power in the state since 2011. Is it a quid pro quo similar between the Southern liquor cartel and Aam Aadmi Party in Delhi, currently being investigated by the ED and the CBI? The quid pro quo theory could extend to any party in power including the BJP. However, the lottery, like the liquor industry, has a dark halo around it. They both are addictive and destructive, though they provide employment to many others and revenue to the states.
Santiago Martin’s two main beneficiaries are political parties opposed to the BJP viz. the DMK and the AITC. The possibility cannot be ruled out that the BJP government returning to power in the Centre might act vindictively. It might even ban the lottery, doing the right thing for the wrong reasons. The Opposition could cry hoarse, victimisation.
The writer is author of the book ‘The Microphone Men: How Orators Created a Modern India’ (2019) and an independent researcher based in New Delhi. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18’s views.
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