Rs. 7,000 crore illegal lottery scam exposed

Lotteries are banned in 17 Indian states, while it is legal to purchase lotteries in the remaining 12 states. However there is an enormous craze for lotteries even in the states where it is banned. This has led to the increasing sale of illegal lotteries across the country. In fact, even in states where lotteries are legal, illegal lottery rackets are rampant because of the stringent provisions of the Lotteries Regulation Act, 1998.

The Lotteries Regulation Act lays down various conditions which have to be complied by all lottery promoting state governments. Some of these conditions are: the state government must print the tickets, the proceeds of the ticket sale must be credited into the public account of the state, the state government shall conduct the draw of all lotteries and no lottery shall have more than one draw per week. It is very difficult for businessmen to follow all these bureaucratic procedures which prompts them to market illegal lotteries.

The irregularities: Apart from illegally selling lotteries in states where they are prohibited, it is also alleged that the winning number always comes from the unsold tickets, people who have the winning combination are denied their prize and if at all given any prize, the amount given is less than the 75 percent (of the total prize money) statutorily fixed.

Illegal lotteries are clandestinely sold at teashops and newspaper stalls across the country. Experts estimate that lottery tickets worth at least Rs. 7,000 crore (out of the Rs.13,000 crore paper lotteries sold in India annually) are illegally sold. According to income tax and other law enforcement officials, lottery kingpin Santiago Martin is primarily responsible for all illegal lottery scams in India. Martin is a 42 year old businessman with powerful political connections. He claims to run legitimate lottery agencies in states where lotteries are not banned. Martin has friends in almost all political parties.

Martins clout: Martin regularly contributes to the CPI (M) fund in Kerala, is allegedly close to top Central Congress leaders and DMK patriarch MK Karunanidhi. The fact that Martin regularly contributes to CPI (M) became known when his Rs. 2 crore donation to CPM newspaper Deshabhiami was leaked due to party infighting. In fact Martin is so close to Karunanidhi that he is making movies based on his writings.

Lack of political will: Investigation agencies are ready to probe matters related to this paper lottery scam and Martins involvement, but Martins powerful political friends stop all investigations. In fact, an FIR was filed in Chennai and Tamil Nadu CID sleuths grilled martin and his associates, after which they confessed the charges. No action has been taken thereafter and Martin is out on bail. It would not be difficult to infer that political pressure has stopped all investigations in the matter.

What will happen now? In all probability, no action will be taken against Martin and his lottery business will continue. Anuj Sharma DIG and Inspector General of the West Bengal CID is quoted as saying, No one complains formally (about the illegal lottery racket) because of the fear of Martin and his men.

To ensure that no fingers are pointed towards him, Martin has a legitimate front: He is the sole distributor of 28 Sikkim lotteries, 17 Tamil Nadu lotteries and 6 Arunachal Pradesh lotteries. Moreover, Martin remains reclusive and is hardly seen in the public domain. Thus, few people would know about his role in the lottery business. A fair judicial probe is the only hope to ensure that gullible people are not looted by bogus claims of making them rich overnight.

BJP leader Vijay Goel spearheaded the banning of single digit lotteries in Delhi and is going to introduce the Lottery Prohibition Bill in Parliament. Unless the law becomes clear on the subject, this racket is likely to continue.

Source: Article titled The Trader of Shadow fortunes published in Tehelka Magazine, Volume 7, Issue 06, dated 13 February, 2010. Available online at http://www.tehelka.com/story_main43.asp?filename=Ne130210the_trader.asp

P.S. More articles to follow as soon as more information about the lotteries scam and Santiago Martin becomes available in the public domain. Efforts are on to bring transparency and accountability.

Read more about Kerala state lottery.