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CRIME:
LOTTERY SCAM
Dream
Fixers
Unscrupulous
lottery operators connive with corrupt officials to fix results of draws,
reducing the entire business to a sham
By
Sayantan Chakravarty
Coincidences
rarely get more intriguing. At Gangtok, on April 18, the director of Sikkim
Lotteries picked a set of 10 numbers that had won the 4th prize in the
state's Yellow Lottery. A few hundred miles away in the Bhutanese capital,
Thimpu, another director was doing the same: fishing out another set of
10 numbers for the 4th prize in the country's Kalpataru Lottery draw.
The numbers at Thimpu and Gangtok were, astonishingly, not just the same.
They came out in the same order as well.
For six months
after this bizarre coincidence, Parliament's Standing Committee on Home
Affairs has debated on how to end the menace of lotteries, and with it
the regular fixing of draws. Last December, when piloting the Lottery
(Prohibition) Bill, 1999, Union Home Minister L.K. Advani said that "malpractices
in the conduct of lotteries and its impact on the poorer sections"
was under the Government's scrutiny.
Were the
April 18 results a mere coincidence, as officials in Sikkim claimed? Or
was it a clumsy piece of fixing? Either way, the Rs 50,000 crore business
(figure claimed by the All India Federation of Lottery Trade and Allied
Industries), in the country that employs around 27 lakh people, hasn't
been the same again. In the eye of the storm is the Coimbatore-based dream
merchant S. Martin, owner of the Martin Lottery Agencies (MLA). With an
annual turnover (profit margins are 2-3 per cent of turnover) between
Rs 4,000-6,000 crore, Martin is easily the most powerful man in the game
today. His agency is the sole distributor in Sikkim with 28 lotteries.
MLA's sister concern, Best and Co, operates 77 lotteries in Thimpu, in
violation of the spirit and rules of the trade. Sikkim owns the trade
names (in lottery trade, name is everything) but has made no effort to
stop the selling of similarly named lotteries in Bhutan.
The incident
has brought the trade's seamier aspects to the fore. Says Vijay Goel,
MP and a member of the standing committee that met last on November 6:
"The entire business is a big scam. The April 18 incident shows how
draws can be fixed by colluding officials and unscrupulous operators."
Goel, whose shrill campaign ended single-digit lottery in the country,
has demanded a CBI investigation into the matter.
The Sikkim
Government informed the Home Ministry that the draws were happenstance.
The state has also decided to stop all computerised draws forthwith. Interestingly,
both the hardware and software for the first ever computerised draw was
provided to the two governments by Martin. Normally, there is little chance
of the numbers being identical. According to software makers Grambls Consultancy,
"The numbers are generated using a "random" function. We
have no control over it."
Ashwani
Khurana, owner of K&Co, till last year India's lottery pasha and the
man who had a 20-year unchallenged run in Sikkim's lottery trade until
Martin displaced him, adds, "It is next to impossible to pull out
10 similar numbers on the same day in two different lotteries in two different
cities. Unless, of course, the whole thing is fixed." He wants the
authorities to probe all lotteries run by Martin in the North-east which
fetch him a daily turnover of around Rs 9 crore.
The number
of winners has also come down, especially in the southern states, where
lotteries now have the biggest markets. "I won't be surprised, given
Martin's track record, if most draws are fixed," charges Khurana.
He may sound like a bitter loser but there is substance in his arguments.
A confidential report by Sanjeev Gupta, director of Himachal Pradesh State
Lotteries, details how in a business of Rs 2,000 crore the state's share
is a paltry Rs 18 crore. The public gets prizes worth Rs 572 crore; the
rest, about Rs 1,409 crore, is siphoned off by operators.
There are
other facets to the intriguing Martin saga. Following raids on Congress
MP M.K. Subba's Golden Group of companies last year, the it Department
suggested the case was fit for a CBI scrutiny. Among other things, it
said, the CBI needed to probe how Martin's son, S. Charles, won Rs 50
lakh in the Nagaland's Azad Hind Bumper Lottery in June 1997. Charles
is a partner of Subba and the lottery was organised by a Subba firm, M.S.
Associates. "Prima facie, a collusion between Martin and Subba in
rigging the results to benefit themselves can be made out," say it
officials.
Subba has
been under a cloud for long. Last year, in a scathing report, the CAG
indicted his firm for failing to deposit sale proceeds of several hundreds
of crores initially with the government. The Crime Branch of Delhi Police
had, in 1992, registered a case of cheating, criminal conspiracy and theft
against the Delhi-based All India Deaf and Dumb Society. Among those named
were Usman Fayaz, MLA's chief executive and current president of the all-India
federation. "The case is pending trial. We filed a chargesheet in
March 1994," confirms K.K. Paul, joint commissioner, Delhi Police.
Among the facts unearthed by the Crime Branch were that the society had
printed only 2.4 lakh of the proposed 24 lakh tickets. The result: ticket
sales fetched Rs 1.2 crore but prizes worth only Rs 12,000 were given
away.
MLA claims
that the draws of April 18 were a coincidence. No prize winner has ever
complained, it says. On Charles winning a prize, Fayaz says the MLA was
within its rights to accept it as the winning number was on an unsold
ticket. As for trying to bring pressure on parliamentarians in the committee,
he says, "We don't pressure them. But certainly we have to think
of the industry, since so many depend on it."
But it's
time for the Government to take a long, hard look at the way the business
is run. There are fewer big prizes. Prizes are announced on unsold tickets
so that the money makes its way back to the operators' kitties. The Himachal
study confirms this. There is short-printing of tickets. Importantly,
most big lotteries do not sell in states of origin but in distant places.
The reason: no one can witness a draw or voice a protest. Martin and his
likes may be selling dreams to millions. But are they robbing them of
their rightful millions?
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The
Indian industry has increased its decibel level of whining. Instead, it
should get the government to deliver, says INDIA TODAY Associate Editor
V. Shankar Aiyar in 
