The Telegraph
Since 1st March, 1999
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Safe bet: lottery to savings

Mumbai, Aug. 18: They may be lottery outlets, but are dispensing a public service.

At least, that’s how the Maharashtra government sees it.

The government has appointed a lottery company as its small savings agent, it was announced at a news conference yesterday. Within a month, InLott Net-based outlets, run by Martin Lottery Agencies Limited, will have separate terminals from which small savings services will be offered to anyone interested in converting his jackpot into schemes like NSC, PPF, post office MIS, KVP or recurring deposits.

The move, the first of its kind, attests to the steady growth in the spread and infrastructure of the latest craze in lottery, the Net-based one. Net lotteries attract crowds because an outlet offers a draw every 15 minutes — there is instant result as well as the perception that if one keeps playing for a certain time, there is a good chance of winning.

“We chose a lottery network because we want to reach out to more potential investors who are not aware of such investment schemes,” says Kavita Gupta, commissioner of the small savings department. The department had earlier engaged financial institutions like Bajaj Capital and HDFC Securities as agents.

“We have 2,000 terminals across Maharashtra already,” says Usman Fayaz, CEO, Martin Group. Fayaz says each outlet will have staff trained to handle customer queries and suggest the right savings scheme. The savings form can be downloaded from the terminal. InLott staff will deposit the amount within two working days at the post office or concerned bank and the customer will get the final receipt.

The government has given a seven-year contract. The revenue to the government is a minimum of Rs 25 crore, an amount that will progressively increase, says Gupta.

The decision also seems to have been prompted by the rapid spread of Net-based lottery. InLott, which started in 2002, has a turnover of Rs 5 crore a day. It is a “run-away success”, says the company, the biggest lottery agent in the country. In Maharashtra alone, the biggest lottery market, the daily turnover is Rs 2 to 3 crore.

Although 91 per cent of it goes into prize money, says Fayaz, the business is growing. “We aim to grow at 4 to 5 per cent every month,” he says. The growth is evident — approach roads to all stations are growing increasingly crowded with Net lottery outlets.

But neither Martin nor government officials will call InLott a Net-based lottery. They will, like other agencies selling Net lottery, call their lottery “conventional paper lottery tickets through Internet”. Critics say it is but a way of getting around the Lotteries Act.

Although the slips issued by computers mention that paper tickets could be issued against them, no ticket-buyer needs them because the game is played then and there. It is also played on the basis of selection of one digit, which is prohibited by the act. Lottery agencies get around by issuing 10 tickets serially together and making the consumer select 10 serial numbers starting with the same digit.

The draw is also constant. Every scheme under the same brand is given a different name, which circumvents the other provision that a lottery cannot have more than one draw a week. InLott’s Megawin can be played 50 times a day with slight variations in name.

But many are worried with the moral implications. “Selling small savings through lottery outlets is another step by the government to legitimise the violation of the Lotteries Act,” says Ahmad Abdi of the Consumer Action Network. “It would not lead gamblers to investing. It would lead investors into gambling.”

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