Lottery Remains India’s Preferred Real Money Game But Online Competition Urges Regulation

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State-run legal lotteries still draw millions of desi players with cheap tickets and easy access. Despite that, high taxation levels, Covid-related lockdowns, and competitive online drawings have brought sales down and put the question of a national lottery regulation back on the table.


In-depth Study Shows The Importance Of Lottery In India

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Lotteries in India are fragmented, mostly State-run, and rarely covered by public financial reports and publications. However, a recent research piece by ENV Media reveals that the lottery remains the nation’s favorite legal form of gambling, with roughly half of all desi players choosing this game wherever available.

Bharat mass media finally noticed the growing importance of mobile gambling apps, eSports, and other skill and casino games, with the need to regulate them becoming self-evident. In this context, the sheer size of the Union lottery market warrants a new strategy and legislation on a national level.

Globalization makes players better informed and more demanding, giving rise to some quality comparison sites for lotteries such as Across demographics and tech experience levels, offshore operators have dented paper ticket sales, yet they are not the only reason.

Black markets and misjudged GST policy have also contributed. The thirteen State governments that allow and promote official lotto draws are likely to need some support from the Centre to protect and grow this important public income source.


The Scope Of Bharat’s Lottery Market

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Lottery ticket revenues are supplemented by income taxes and substantial GST going into State coffers. More importantly, there are around a million small-time retailers, making lotteries a crucial source of local employment.

The ENV Media research cites annual net revenues of up to Rs 50,000 crore going towards public finances. Considering additional positive spillover effects, the sector’s social and economic potential is undeniable, as it contributes to funding welfare programs and other public agendas.


Illegal Lottery Markets And Online Competition Hurting Government Revenues

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Given the boom in smartphone use and internet penetration, it should be easier to estimate and regulate the lottery market in India. Yet, the low levels of digital support that State-run draws offer to players reveal an inability to monitor, tax, and protect their lottery business.

At a time when India has grown into a true online global power, the Governments’ lottery revenues have shrunk dramatically in the past couple of years, to about Rs 15,000 crore. The rise in illegal competition, however, has only been a second-hand result of some recent miscalculated tax legislation.

The high GST rates (28%) imposed on all goods and services across the Union, including entertainment and lottery, have transferred the higher costs to the players. While black lottery markets had been on the decline for a number of years, their current size is estimated to be more than half of the total lottery industry.

Offshore lottery distributors remain the safer alternative. ENV Media’s own data shows that over 30% of all organic search volume is related to lottery. Online traffic and player acquisition rose even higher during the Covid-induced lockdowns (with monthly peaks of 60.35%).

The company’s analysts suggest that the above numbers expose the inefficiency of any blanket bans that States or the Centre have occasionally considered. Players simply turn to online lottery alternatives or black market retailers. Moreover, offshore lottery platforms often pay out only the net winnings to their users, withholding taxes at the source.

These trends point to the need for a National Gambling Strategy, with lotteries occupying a prominent place in it. A Gaming Commission serving as an independent regulator and some central-level legislation to adjust taxation levels might also be needed to avoid putting down an important public funding stream and the people’s favorite game.

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Anushka Jain
the authorAnushka Jain