Fortune play

If there are still any doubts about the seamy side to the lottery business, the special Comptroller and Auditor General audit of the Naga...

June 26, 1999 12:00 AM IST

3 min read

If there are still any doubts about the seamy side to the lottery business, the special Comptroller and Auditor General audit of the Nagaland lottery must put them to rest. If there are still any murmurs of protest over the Union cabinet8217;s decision three months ago to ban state lotteries, the fresh revelations should silence them. And if there are still any gullible folk out there hoping to win themselves a fortune, this should come as an eye-opener. In a scam that is bound to have a political fallout and in which the extent of fraud may well exceed Rs 10,000 crore, it turns out that there have been glaringly few winners from the general public, with an overwhelming percentage of the spoils going to persons associated with the lottery trade. But will this dampen enthusiasm to invest in an ultimately worthless piece of paper and wait for lady luck to oblige and do the rest? Probably not, human nature being what it is. Hence, the onus remains with the government to persist with its role as moral guide andtackle this social evil.

But then, in the Nagaland lottery scam, it8217;s not only the ticket-buyers who have been defrauded, the state exchequer has been taken for a merry ride allegedly by the state8217;s sole distributor, a company associated with India8217;s 8220;lottery king8221; and former Congress MP M.S. Subba. Consider the facts. From 1993 to 1997, the period under CAG scrutiny, the distributor never paid up the Rs 3,460 crore it owed the state government in taxable prize money as well as in profit-sharing. The fraud didn8217;t stop there. While the Nagaland government had said that 91 per cent of the face value of tickets would constitute prize money, eventually just over 78 per cent was declared as such. The balance withdrawn from prize money: Rs 5,000 crore. And we all know how little of that 78 per cent went to the unsuspecting ticket buyers. The S.C. Jamir government, for its part, is caught in a bind, and with elections around the corner. The fact that it has been indicted will be fodder for the opposition. In themeantime, it would be stating the obvious to urge the enforcement agencies to pin responsibility and book the offenders, but they would also be well advised to examine the account books of other lotteries.

What of the lottery trade as such? When the cabinet had announced its intent to ban state lotteries and to foster a consensus among state governments to pass legislation to also ban private lotteries, there were howls of protest. The northeastern states worried about the consequent losses in annual revenue and the regime in Kerala spoke of the 250,000 jobs that would be jeopardised in the state. These are very pertinent points, but they must be balanced against the bewildering dimension of this destructive addiction which leads to the frittering away of millions of meagre incomes 8212; and against the scams it engenders. And even if a ban is finally enforced, care will have to be taken that it is actually enforced, that wily fly-by-night operators do not exploit the ensuing vacuum.

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