Future Gaming, others halted govt's plans to amending lottery rules

The Ministry of Home Affairs proposal to amend Lottery Regulation Act was junked due to resistance from influential market players like Santiago Martin, an Economic Times report has claimed

The Union Home Ministry's proposal to amend the Lotteries Regulation Act 1998 and the revision of Lotteries Regulations Rules 2010 was muted following several petitions by big market players, including lottery king Santiago Martin's Future Gaming and Hotel Services, according to a report by The Economic Times.

The Ministry's actions, seven years ago, followed reports of irregularities by the Comptroller and Auditor General (CAG), the report added.

In a 2017 report submitted to the Parliament, the CAG had flagged serious irregularities in Sikkim, Mizoram, and Nagaland, saying the violations favoured marketing agents such as Future Gaming, the ET report noted. Citing officials, the report further added that Future Gaming also operated in Punjab, Manipur, Meghalaya, Nagaland and was involved in lottery scams in Tamil Nadu, Andhra Pradesh, Bihar, Jharkhand.

 

"The marketing agents (MA) have cornered 98.60 per cent of sale proceeds of lotteries while the state could receive a meagre 1.40 per cent of sale proceeds, during the audit period 2010-2016," The Economic Times, citing the CAG report, said.

As laid down in the Lotteries Regulation Act, 1998, the proceeds from the sale of lottery tickets shall be credited to the public account of the state. The Lottery Regulation Rules, 2010, required the organising state to ensure proceeds from the sale of lottery tickets received from distributors or selling agents should be deposited either in the consolidated fund of the organising state or in the public account. 

It further stated that the organising state is responsible for ensuring that income tax is paid on prizes wherever applicable, by deducting it at the source. Also, the organising state must ensure that the prize money is credited to the bank account(s) of the winners.

The MHA, in September 2023, wrote to eight lottery-running states about the alleged "frauds" and "irregularities" linked to Santiago Martin's companies and told them to stay away. The letter noted that it had received complaints with "serious allegations" against Martin and his lottery firms.

In early 2019, the Enforcement Directorate started a case of money laundering against Future Gaming. By July 2019, the ED had attached assets worth over Rs 250 crore. Three years later, on April 2, 2022, the ED attached movable assets worth Rs 409.92 crore in the case, and five days later on April 7, Future Gaming bought Rs 100 crore in electoral bonds.

"Raids were also conducted on properties owned by Martin and his son-in-law, Aadhav Arjun, in September 2022 and April 2023. In this period, Future Gaming bought electoral bonds worth Rs 303 crore," the ET report said.

In the recent data regarding the electoral bonds made public by the Election Commission of India (ECI), Future Gaming and Hotel Services emerged as one of the biggest buyers of the electoral bonds, worth Rs 1,368 crore. The company donated Rs 509 crore to the Dravida Munnetra Kazhagam (DMK) in the period between FY20 and FY24.