Government Restrictions on Lottery is Leading to a Massive Loss of Revenue for (state) Governments

Lottery is legal only in 10 Indian states

INDIA (March 1, 2024) — Government restrictions on lottery are having a detrimental effect in the age of the internet, according to a new study. Not only is it leading to a massive loss of revenue for (state) governments, it is also leaving Indians to look for online alternatives with no legal protection, local media outlet ‘THE WEEK‘ reported research unveiled on Friday by the Pahle India Foundation.

Instead, if properly regulated and legalised, lotteries could contribute more than Rs 91,000 crore every year to the exchequer.

The findings by the foundation, a policy research institution founded by former NITI Aayog vice chairman Rajiv Kumar, is the result of a year-long research.

The study noted that lottery being legal only in 10 Indian states has resulted in alternatives in the online space, with offshore entities offering gambling opportunities. This is leading to a massive loss of revenue for the government.

It also exposes players to fraud. With cheap internet and smartphone penetration and an underground sector not answerable to law, those who indulge in it are left with no legal recourse.

“In examining the trade-offs between bans and regulations, it is now important to assess the feasibility of bans,” Pahle India Foundation executive director Ravi Pokharna told ‘THE WEEK‘. “Often, banning lotteries has resulted in the industry going underground, endangering player’s safety, exposing participants to frauds and malpractices and loss of revenue for the government.”

“If people are still playing despite the ban, which seems to be the case in India, it is critical for governments to consider effective regulation to protect consumer interests,” Pokharna noted. The study also pointed out how existing regulations for the sector are around 25 years old and leave a lot to be desired when compared to global best practices promoting player protection, responsible gaming, and transparency.

SOURCE: The WEEK