MHA letter banning Sikkim Lotteries in Kerala finally reaches State Govt

…BUT SIKKIM LOTTERIES WAS NOT OPERATING IN KERALA FOR THE PAST 18 MONTHS CLAIMS LOTTERY OPERATOR
GANGTOK, 31 Jan: The official letter from the Ministry of Home Affairs intimating the State government of the banning of Sikkim paper lotteries in the state of Kerala is informed to have arrived at the Lotteries Directorate, Government of Sikkim. The MHA has banned the Sikkim lotteries for a period of two years for having violated certain conditions of the Lottery Regulations by the marketing agent of Sikkim Lotteries- Future Gaming. The MHA letter has now been put up to the State government by the Director, Lotteries for further action. There is a likelihood that the State government will lodge an appeal with the Central government.
But while the central government has temporarily banned Sikkim lotteries in Kerala, the company operating the lotteries had stopped operations there a year and a half ago due to the “excessive sales tax”, it has been revealed.
“The Kerala government was charging lottery tax at Rs.25 lakhs per draw,” informs an official of Future Gaming which operates the Sikkim paper lottery. The suspension of operations has caused losses in the crores to the company it is informed. As a result, Sikkim government, which also earns crores of rupees in terms of revenue from lottery sales and draws has also suffered losses. Apart from the losses incurred by the agency and the government, another 500 people employed by Future Gaming in Kerala have been laid off for the past year and half.
The primary cause of contention between the Kerala and Sikkim governments, it has been revealed, was the allegation leveled by the Kerala government that the company operating Sikkim state lotteries was not abiding by the rules and was issuing double and triple digit lotteries. These had been banned by the Lotteries (Regulation) Rules, 2010 which came into force in April, 2010. Till then, the lotteries were single, double or triple digits all of which were banned now.
Company officials inform that just when, in September 2010, they were ready with a four digit lottery the Kerala government hiked the lottery tax from Rs. 7 lakh to Rs. 25 lakh per draw. As per company officials it had become very difficult to sustain operations in Kerala after the huge hike in the lottery tax and the company thought better of it.
Instead, a petition was filed in the Kerala high court challenging the hike. In the meanwhile another controversy cropped up with the imposition of the Lottery Regulations and the subsequent banning of single, double and triple digit lotteries.
In fact, Sikkim paper lotteries stopped sales in Kerala on 1 September, 2010 inform officials of Future Gaming which operate the only paper lotteries of the state government.
The “termination” of sales of Sikkim lotteries in Kerala has resulted in huge financial losses and the “retrenchment” of 500 employees of Future Gaming. The financial loss to the company has been to the tune of a minimum of Rs. 2 crore per month.
Most interestingly, it is informed that all the while that the lotteries had been suspended in Kerala the 500 odd employees from retailers to dealers to agents employed by the company were being provided their due salaries and wages.  But now, with the suspension of Sikkim lotteries in Kerala likely to be prolonged, the company will have to rethink about continued provision of salaries and wages to its agents there. The government too will continue to suffer losses in terms of revenue from sales and service tax.