Kerala Lotteries posts 22% growth in 2017-18, profit grows marginally

Kerala Lotteries, the government-run lottery business that contributes to the state’s coffers, has seen a growth of over 22 per cent in 2017-18, performing better than the previous years. However, net profit from lottery sales has grown 0.23 per cent during the year.

Sales have grown to Rs 90.34 billion in 2017-18, compared to Rs 73.94 billion in the previous year. Sales in 2015-16 was at Rs 63.17 billion. 

The net profit from lottery sales was at Rs 16.95 billion in 2017-18. In the previous year, the figure stood at Rs 16.91 billion. The state government had recently said sales growth in the financial year 2017-18 was due to the changes it implemented in that period.

“…the changes in the prize structure and the drop in ticket price…standarization in prices have increased sales from Rs 6.84 billion in May 2017 to Rs 7.07 billion after the changes were implemented in June 2017. It has grown to Rs 7.43 billion in July and the growth continued in the following months,” Kerala Finance Minister T M Thomas Isaac had said at the State Assembly.

The profit during 2016-17 was at Rs 16.91 billion, which was a 15.7 per cent growth over the profit of Rs 14.61 billion in 2015-16. 

“In the budget speech for 2018-19, we have said that the revenue from lottery sales would be used for the Comprehensive Health Care Scheme. The scheme is currently under development," Isaac said on June 5 in response to a query in the Assembly.

Kerala Lotteries never made a loss since its inception about five decades ago, said lottery department officials. In 1967, when it was founded, revenue from lottery sales was Rs 2 million, which reached Rs 6.25 billion in 2009- 2010.

Kerala prints around 9.6 million lottery tickets every week. The increase in the number of tickets has helped the distribution and increased government revenue, said the department earlier this year. The state has been taking various steps to keep lottery companies from other states to enter Kerala market and to curb the illegal lottery systems.

“Kerala has estimated to generate Rs 142.71 billion through non-tax sources in 2018-19. The estimated increase of 21.7 per cent in non-tax revenue will be driven by receipts from state lotteries. In 2018-19, state lotteries have been budgeted to contribute Rs 111.10 billion,” according to a report by PRS Legislative Research on the State Budget 2018-19. 

It added the state's revenue receipts, which is 57 per cent of the total revenue, was down by 5.7 per cent at Rs 53.18 billion during 2017-18 compared to estimates, mainly due to the under-collection of revenue on account of state lotteries. 

The lottery industry in the state, controlled and operated by the government, has seen its peak growth in 2014-15 when it registered a 43.5 per cent growth from a Rs 37.93 billion sales revenue in 2013-14.

According to the previous government, the lottery business in the state grew almost 10 fold, from Rs 5.57 billion in 2010-11 to Rs 54.45 billion in 2014-15 after the Congress-led government took charge. 

The growth has provided employment to thousands of agents/sellers, with income contribution to the tune of Rs 15.24 billion in the form of commission in 2014-15. 

However, a report by the Comptroller Auditor General (CAG) in 2016 pointed out that while the income from lotteries is a major source of revenue under the non-tax category — at Rs 54.45 billion in 2014-15 — equally high expenditure for the payment of prize, commission and others has resulted in a net yield of Rs 9.6 billion.