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‘Congress-NCP govenment flouted norms in lottery operations’

Document procured through RTI; former IAS officer demands probe by ACB.

Written by Shubhangi Khapre | Mumbai |
June 14, 2016 4:44:02 am

A 15-page “confidential report” on lottery operations, allegedly kept under wraps during the Congress-NCP regime, has exposed gross violation of Central guidelines, and a “nexus” between the finance department and private lottery operators, leading to huge revenue loss.

The document procured through the Right To Information Act revealed the details.

Former IAS officer Anand Kulkarni, has now written to the BJP-led Maharashtra government demanding an investigation by the Anti-Corruption Bureau into lottery operations between 2001 and 2008. He held former finance minister Jayant Patil, the NCP leader who held the portfolio then, accountable for the resulting revenue loss.


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The report reveals how private operator M/s Martin Lottery Agencies controlled the Maharashtra State Lottery operations sitting in Chennai. It says the Maharashtra State Lottery Board, whose chairman is the minister of finance, not only considered Martin’s lone tender but also gave it repeated extensions.

In 2007, the then home minister R R Patil had ordered a CID probe headed by the then additional director general of police S P S Yadav into the lottery scam. The findings alleged a nexus between the Ministry of Finance and the private lottery company and advocated immediate closure of online lottery in the state.

According to Nana Kute Patil, chief of Bulandha Chavan Sanghatana, who blew the whistle on the lottery scam, “The revenue loss per year is Rs 30,000 crore.” An official in the finance ministry, however, said, “While we don’t discount the magnitude of corruption, it would be difficult to ascertain the amount as its operations were from outside the state.”

The most shocking aspect in the report cited by officials in the finance department relates to the government allowing a computer server in Chennai, which it never controlled nor had mechanism to check its misuse, to conduct lottery operations. What was shown by the state government as online lottery server station was just a sub-centre in Mumbai.

On February 1, 2001, the then under secretary, Government of India, Ramesh Kumar, wrote: “Section (4) of the Lotteries (Regulation) Act, 1998, provides that prizes shall not be offered on pre-announced number or on basis on single digit number.”

His letter admonished the government for allowing single digit lotteries under the garb that double digits would amount to fraud. “The spirit of the Lotteries Regulation Act cannot be violated by employing an indirect method. It will amount to circumventing of law, which means nearly, if not quite synonymous with, fraud,” it said.

A letter from the state finance department countered the Centre’s warning, arguing, “Maharashtra government has entered into agreements with M/S Martin Lottery Agencies Ltd., Mumbai and Sugal and Damani Mumbai who are bulk agents to sell two digit lotteries under the name of Maharashtra Deluxe and Maharashtra in all the lottery selling states. Since online and internet lotteries are duly authorized by state government and is a source of revenue for the Maharashtra government, it is requested that no action should be taken against the same.” However, it acknowledged that tender was received from only Martin Lottery Agencies, which was given extension twice.

Speaking to The Indian Express, Kulkarni said, “In my 34 years’ career, I have never served in the Ministry of Finance. But I can state with absolute certainty that the then finance minister Jayant Patil will have to ask many questions and own responsibility.” He argued, “After all, chairman of the Maharashtra State Lottery Board is the finance minister. He chairs every single meeting.” Kulkarni said he wondered why did the government not act on a report “which exposed the nexus between the ministry of finance and M/S Martin”.

He said it seemed the report was hushed up to save vested interest in the government and private lottery companies.

When contacted, Patil, an NCP leader, told The Indian Express, “I will have to go through details of the RTI reply. But as far as I remember, I ushered in major reforms in the sector to enhance revenue. We drastically reduced lottery draws. We also took steps to tax lotteries operated in Maharashtra from other states like Sikkim, Assam, etc. Measures were taken to dissuade youngsters from taking to lottery.”

Asked if he would subscribe to charge that there was loss of revenue due to manipulations, he said, “It will be difficult to state off hand unless I look into all details.”

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