In a three-part investigation, Senior Associate Editor George Iype finds out how government-run lotteries ruin the poor and make the scamsters rich.
Part I: 'The lottery business is the single biggest financial scam in India'
Every day, millions of Indians buy lottery tickets in the hope that it will lead them to a better future. They believe that one day, some day, Lady Luck will smile on them.
They do not know that a nexus between lottery agents, corrupt officials and influential politicians ensures they benefit the least from the Rs 100 billion business.
Lotteries rarely help people; more often than not, they ruin them. Most people, though, cannot resist the lure of instant riches. These wannabe millionaires invest Rs 5 to Rs 10 every day in the hope that they will win a fortune. Instead, they lose. Every day. The lucky ones get a consolation prize of Rs 20. The luckier ones win Rs 100. Rarely, though, do they become millionaires.
"You may win a couple of millions by participating in Amitabh Bachchan's Kaun Banega Crorepati, but not if you buy a state government-run lottery ticket," says Coimbatore-based social activist Malini Mohan.
For many years now, Mohan has led a sustained campaign against the sale of lottery tickets in the country. "Lotteries only make the poor poorer. Some of them even commit suicide. Lotteries ruin families. It is a social evil," she says, even as she lists the tragic results of lottery-related fraud.
Like the one perpetrated on Ponnuswamy Kumaran, a shopkeeper in Coimbatore. His happiness knew no bounds when the number on his bumper lottery ticket matched the prize-winning number listed in the local Tamil daily. It meant he had won a dizzy Rs 10 million.
This was the first time Kumaran -- who has three daughters and two sons -- had ever won anything, even though he bought lottery tickets almost every day. "I have been spending too much money on lotteries," he says. "I badly wanted to win a prize. When I found I got the first prize, I nearly died of happiness."
A few days later, he nearly died of shock.
For the events that unfolded were beyond his imagination. An excited Kumaran immediately approached the agent from whom he bought the ticket. The agent told him the prize money could only be deposited in a bank account. Kumaran, who did not have one, promptly opened an account at a local bank and waited for his money.
A week passed. Two weeks. A month. The bank said there was no response from Madras. Finally, the bank got a note which said the prize money had already been claimed by another winner.
Since then, Kumaran has regularly pleaded his case with the commissioner of the Tamil Nadu Raffle Scheme in Madras. But his visits yielded no result. "I do not know how this happened. I have not yet got the money, though my ticket says I am the winner of the first prize," he laments.
It has been six months since he won the prize; raffle scheme officials say they are still trying to ascertain how two people had tickets with the same number.
Meanwhile, Kumaran continues to buy lottery tickets. "I have no other means to marry off my daughters." Then, he adds, "I feel I will win more lotteries."
Psychiatrists say fortune seekers like Kumaran are addicts.
"The concept of lotteries was introduced in the country as a harmless pleasure. But, over the years, it has become a social evil. There are cases where people have developed mental problems or even attempted suicide because of their insatiable urge to win," says Dr Karuna Sawant, a Delhi-based psychiatrist who has published a research paper on lottery mania.
Lottery-related suicides, says a concerned Dr Sawant, are on the rise. In 1999, Kailash Jain, a grocery shop owner in Bhopal, killed himself by consuming poison. The father of three daughters, he had accumulated debts of more than Rs 300,000 as a result of his passion for lottery tickets.
Then there was Gurudev Singh, who lived in Delhi's Guru Nanakpura area. In 1998, he lost at the lotteries yet again. This time, the margin was very slim -- except for the last digit, the numbers on his ticket were the same as the numbers on the the winning Rs 10 million Sikkim lottery ticket. The difference was marginal -- his ticket ended with the number 2 while the winning ticket ended with the number 3. In despair, he and his family of four committed suicide.
In 1999, Madhya Pradesh Chief Minister Digvijay Singh wrote to Prime Minister Atal Bihari Vajpayee pressing for a central ordinance to ban both the Sikkim and Bhutan lotteries in his state. A MP home department report had revealed that some 35 families had committed suicide after losing the Bhutan and Sikkim lottery draws.
The same year, the Allahabad high court directed the Uttar Pradesh government to impose a complete ban on all forms of lotteries. The reason? The state had witnessed a spate of lottery-related suicides.
K P Madhavan, a retired professor of sociology, believes growing unemployment and an increase in the price of essential commodities are the two major reasons that prompt people to buy lottery tickets. "It is in man's nature to attempt to make money easily. So a concept like the lottery fits in well in a poor country like India." Unfortunately, says Professor Madhavan, who taught at Delhi University, it only increases the levels of frustration and tension in families, resulting occasionally in suicides.
Despite the irregularities and scandals, the lottery business thrives in the country. Conservative estimates say it is worth around Rs 100 billion. Unofficially, agents claim the business is worth anything between Rs 200 billion and Rs 300 billion. "If properly managed and regularised, lotteries can be one of the biggest sources of tax-related income for the Indian government," says Usman Fayaz, president, All India Federation of Lottery Trade and Allied Industries.
Usman Fayaz
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According to Fayaz, who is also chief executive officer of the Martin Lottery Agencies, the lottery trade employs more than 2.7 million people across the country. "The lottery trade generates employment for millions including the illiterate and the handicapped. A footpath vendor needs to invest a mere Rs 500 initially in order to earn at least Rs 100 a day."
Fayaz believes banning the lottery trade is not a solution; it will only create more problems. "Let the government cleanse the lottery system if corruption has set in," he says. "The potential of the lottery industry as a means of mobilising resources is tremendous."
But official studies say state governments earn only 0.1 to 0.2 per cent from the total sales of lottery tickets in the country. Sixty-eight per cent reverts to the public in multi-digit lotteries; the rest is shared between the sole distributors, wholesalers, agents, sub-agents and vendors.
Meanwhile, the lottery demon continues to claim lives. Even as it lures more and more people to try their luck at winning a few million rupees.
Can lotteries be banned?
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