Sikkim State paper lotteries on the verge of extinction

GANGTOK, 15 Jan: Sikkim State lotteries, by all indications, could go extinct by the year end. In fact, sources operating the lottery business here in Sikkim hint that the termination of Sikkim lotteries may be as soon as within 6 months, and with it will cease a sizeable source of revenue for the State government.
West Bengal is the only remaining State where the Sikkim state paper lotteries are operating at present. Even this is likely to shut if Mamta Banerjee and her government continue with their present policy of hiking tax on the lotteries. Around half of the Sikkim paper lotteries have stopped sales in West Bengal since 01 December, 2011. The reason – extreme hike in lottery sales tax. In effect, Future Gaming has now only 4 lotteries out of its full strength of 8 lotteries operating in West Bengal now.
The West Bengal government, on 28 November, 2011, increased the lottery tax five-fold to Rs. 5 lakh per draw resulting in the withdrawal of half of the Sikkim lotteries sold there. Till a few months ago, there was no tax on lotteries in West Bengal making it a very profitable place for Sikkim state lotteries. There were 8 Sikkim lotteries being operated in WB till November 2011 and in fact the first levy of tax was imposed by the West Bengal government in July 2011 at Rs.1 lakh per draw.
Sources inform that should the tax be increased by another Rs.2 lakh, Sikkim paper lottery operations will come to a close there. It is very likely that the lottery tax will be hiked further and in all likelihood, lottery operators here opine that in another 6 months they will have to close shop.
There is nothing the state government can do about it.
An easy and simple avenue of revenue for the state government will close and is, in fact, already dwindling. Officials at the Lotteries Directorate informed that there has been tremendous impact on the revenue due to the suspension of operations in Kerala, and now with West Bengal also hinting that it is averse to lottery operations, the State is losing out on revenue in the crores.
In comparison, the Sikkim government levies only Rs. 2,000 per draw which is the least among all the states in the country. Maharashtra and Punjab, the only two other states were lotteries operate in the country, levy Rs,, 75,000 and Rs.50,000 a draw respectively.
The Rs. 250-crore-a-month lottery retail trade in West Bengal, offering livelihood to nearly two lakh people had pulled down shutters in protest against steep hike in taxes by the West Bengal government. West Bengal is the second largest lottery market, after Maharashtra, contributing nearly one-fifth of the national turnover of Rs 1,200 crore a month. The lottery market in West Bengal is primarily dominated by draws from the Sikkim and Nagaland government lotteries apart from a few draws from the West Bengal government.
Each of the three lottery operators in the State, Future Gaming which operates the only Sikkim paper lotteries, Tashi Delek and Summit Online, both of which operate online lotteries, pay a minimum of Rs. 11 crore each, which is binding, to the state government. The rest of the revenue depends on sales proceeds.
On average, Future Gaming alone pays about Rs. 30 crores a year to the state government as revenue.
Other states which have banned Sikkim paper lotteries include Tamil Nadu which banned the lottery in the year 2003, Karnataka in 2007, and Andhra Pradesh. As mentioned, as of now the only state where Sikkim paper lotteries operate outside Sikkim is West Bengal. While Kerala has not banned the lotteries, the extreme hike in lottery tax to Rs. 25 lakh per draw has virtually ensured that it is an impractical trade there.