With the electoral bonds making the headlines, the name of the influential lottery magnate Santiago Martin of Future Gaming and Hotel Services PR has come to the fore. Called the ‘Lottery King’, Mr. Martin is said to have built his conglomerate from the lottery trade that once flourished and played a pivotal role in Tamil Nadu’s revenue and commerce. Against this backdrop, it would be interesting to look back at how the lottery trade held sway over the State before it was banned two decades ago.
“The State-sponsored sale of raffle or lottery tickets, then costing ₹1 each, kicked off in Tamil Nadu in the late 1960s during the government of C.N. Annadurai, with a catchy slogan vizhunthaal veetuku, vizhaavitaal naatuku (roughly, the common man as well as the State could benefit from the tickets), entailing a cash prize of up to ₹1 lakh. There used to be bumper draws, too, during festivals with a prize of up to ₹5 lakh,” recalls political commentator Durai Karuna.
State earned huge revenue
Among the lot were the general tickets, which were sold over a month and for which a date would be set for draw of lots to determine the winner; weekly lotteries; and even instant lotteries (in which the results could be found instantly upon scratching off a seal on the tickets), says Om Prakash, a senior advocate of the Madras High Court. For the States, lotteries were a commercial activity and a means of increasing their revenue. Hence, they enacted laws for the purpose. The State sales cess levied on the tickets helped to boost revenue.
Reports in The Hindu document Tamil Nadu’s income from this trade. In 1970, it was ahead of nine other States in revenue. “Tamil Nadu heads the 10 States that have launched lotteries to mobilise funds for development projects, with an income of over ₹10 crore from the source,” says a report dated March 13, 1970. The State had collected ₹3 crore more than Maharashtra, which came in second.
Control rested with the State
The control over the printing of tickets to organising the sale through agencies had rested with the State government in the initial years. However, over time, private players entered the field and gained monopoly over the market, and the tickets of other States began to be sold in Tamil Nadu, says Mr. Om Prakash. “This used to be the norm until the Centre decided to intervene by promulgating an Ordinance in 1997, which subsequently became the Lotteries (Regulation) Act, 1998. This put an end to the role of private entities in organising lotteries and printing tickets and conducting draws, handing these responsibilities to the respective States, with certain conditions. Private agencies could only be deployed to distribute and sell the tickets henceforth.”
From 1970 to the 1990s, the Tamil Nadu government had raised concerns many times over the sale of lotteries of other States in its territory. In fact, in 1972, the government decided to enforce a ban on the sale of lotteries of other States, citing apprehensions about “income from its own lottery tickets getting affected”, says a report in The Hindu. This, and more such bans, were challenged in court and subsequently revoked. However, when the Centre’s 1998 Act introduced a Section, allowing the State to ban the sale of lotteries of other States in its jurisdiction, lottery-dealers went to court.
“In an interpretation, the Supreme Court decided that such a ban, if imposed by a State, shall be applicable to lotteries of all the States uniformly. Simply put, for a State to ban the sale of lotteries of other States, it should not be selling any lottery tickets of its own in the first place,” Mr. Om Prakash adds.
A complete ban
While the 1998 Act curbed the monopoly and intensified State control, people’s addiction to lottery tickets was still high. K. Balu, advocate and spokesperson of the Pattali Makkal Katchi (PMK), compares the “craze” to that witnessed during gambling or betting in horse-races. “There used to be 10-15 ticket-sellers at every bus stop in the State and two or three inside every bus selling the tickets. One could also see thousands of these tickets discarded in bins, or dumped elsewhere, denoting how bad the addiction was. Unemployed youths and those from the poorer sections were the most-affected,” Mr. Balu says. The PMK was among the parties that had vociferously demanded a ban on lotteries.
It all began under the watchful eyes of the government, but it led to numerous families losing their savings and becoming paupers. The situation prompted the AIADMK government, under Jayalalithaa, to abolish the system, Mr. Durai Karuna says. In January 2003, the sale of lottery tickets in Tamil Nadu (both of the State and of other States) were banned for “public good”.
Traders, sellers, and private agencies made several representations against the ban and many of them moved court. The Hindu reports document the arrest of several traders for selling the banned tickets. In 2006, the All India Federation of Lottery Trade and Allied Industries even pledged its support to the party that would revoke the ban. However, even the succeeding Karunanidhi government refused to lift it.
No reintroduction
More recently, in 2021, AIADMK leader Edappadi K. Palaniswami raised concerns over “attempts to reintroduce” lottery tickets. The apprehensions were dismissed by the then Finance Minister, Palanivel Thiaga Rajan. Notably, some politicians have voiced their support to reintroduction of the lottery system, with stringent regulations. Sivaganga MP Karti P. Chidambaram is one among them. “Lottery should be legalised. The State must run it, and it should be done in a transparent manner. Aadhaar numbers and bank account links should be established [while disbursing money] and the proceeds should be used to pay the college fee for those who studied at government schools and secured admission to higher educational institutions on merit,” he told The Hindu.
