Despite the best efforts of many of India’s state governments to fight illegal offshore lotteries, they are losing millions in tax revenue.
Lottery industry expert Jaydeep Chakravartty recently wrote about how blanket bans on lotteries in the country produced little results, and forced consumers to choose between offshore providers and local black markets.
Bans on online lotteries are not effective, and operators have developed several ways of selling tickets. Chakravartty advises state governments should take advantage of the technology to digitize their products—making them more competitive among younger people.
The tech-savvy younger generations find offshore platforms more appealing because they can access them with apps and on social media. Foreign companies such as lotto smile/lotto247 specially market to Indians, which make up a huge market. States that lack the technology are at a competitive disadvantage against these platforms.
Lotteries have been popular in India for thousands of years. Currently they are legal and very popular in about 10 states but illegal in others. In the states where they are legal, they are a major source of income.
Although there are no blanket bans in the country, they are only legal in a few states, including Kerala, Goa, Maharashtra, Punjab, West Bengal, Assam, Arunachal Pradesh, Meghalaya, Manipur, Sikkim, Nagaland, and Mizoram.
Kerala was the first state after independence to legalize lotteries, in 1967. It was also the first to tax them. It makes up to 12,000 crore ($2.4 billion) annually and is one of the state’s major sources of non-tax revenue.
The federal government’s Lotteries (Regulation) Act 1998 allows each state to make its own laws.
Where lotteries are legal, vendors get to keep 10 percent as a commission. Agents also get a percentage of the selling price.
