CHURCHGATE STATION, MUMBAI
March 28, 2006 6.00-6.45 p.m.

Tens of thousands of souls stream past in the bustle of the evening rush hour, catching trains on Mumbai's overcrowded suburban system. But some of the office-goers make a small detour before heading back to their families, a detour to Sai Agencies, a stall on the subway leading to Churchgate, to test their luck and play the lottery. But over the past few days, lottery store owners and regular players have been very uptight. Some representatives of the Democratic Front government in Maharashtra have been talking of banning the lottery trade. Contradictory statements have emerged since, but store owners are perplexed and angry that such talk is happening in the first place.

Kanti Reddy, proprietor of Sai Agencies, has been selling lotteries for over 17 years. He started out with a small pushcart and now has a shop with computers. "Why does the government want to put me out of business?" Reddy wants to know. "I don't force anybody to play; in fact, I provide employment for 15 people here." It is estimated that over 10,000 people are employed in selling lotteries across the Greater Mumbai area alone. Obviously, the people here just love the lottery.

A few kilometres down the road, Melville Patrao, Chief Operating Officer, Playwin, is equally frustrated, but believes that the government won't ban lotteries after all. "Do you know who is one of the largest lottery operators in Maharashtra? The state government itself," he says. But, as he quickly points out, the talk isn't about banning all lotteries, but the extremely addictive '2-digit' draws.

What are '2-digit' draws? These high-frequency lotteries allow users to choose any two-digit number for their ticket, and every 15 minutes between one in the afternoon and nine at night, a computer picks a random number. Even though the tickets are fairly cheap, topping out at Rs 100 (hourly draws tend to be priced higher), these are the most popular lotteries.

Patrao agrees that there needs to be a bit more regulation on these lotteries. "I believe that it might make sense to increase the intervals to every half-hour and reduce the time from eight hours to five or six hours. It is true that there are some, albeit very few, people who spend the entire day playing such lotteries," he says.

Back at Sai Agencies, a patron, K.K. Sinha, tells this correspondent that he just won Rs 2,000 on the 6.15 p.m. draw from a Rs 55 ticket. "I think the lottery gives me hope, and it is important for Indians to have that (the hope that they can win). I know I lose money on the whole, but you never know one day I might win the big prize," says Sinha, dreamy-eyed. A couple of his peers around him nod their heads in unison, saying "Barabar, barabar."

It is estimated that Indians spend Rs 50,000 crore, over 1.5 per cent of the country's GDP, on lotteries every year. And these are numbers collated by industry body aifltai, which also estimates that the governments earn Rs 500 crore in taxes through these lotteries. Most lotteries, private or public, have a payout rate of 91 per cent, which means that for every Rs 100 bet, Rs 91 is returned to players in the form of winnings, Re 1 goes to the government in taxes and the remaining Rs 8 is divided between the lottery operator and the agent and ranges from 50-50 to 75-25. In fact, most lottery operators nowadays have fairly transparent financial practices, with some even allowing users to look at lists of overall intakes and outflows.

Staring at a shutdown: Sai Agencies' Kanti Reddy, an industry veteran of 17 years, says a ban would ruin small-time vendors like himself

Reddy claims that over 500-600 people come to his outlet every day, and sometimes the number rises to over a thousand when a big draw (Playwin's Thursday Mega Draw is a big attraction, with crores of rupees on the line) is taking place. "If the government bans lotteries, who will benefit? The illegal lottery operators. Do you think people will stop playing lotteries just because the government bans it? In fact, I think it is the matka operators who have been trying to get lotteries banned," he states. "Any move to ban lotteries, even these instant ones, would directly help Mumbai's underworld," warns Patrao. The reason that most lottery operators are upset about any ban is that Maharashtra is India's biggest better on lotteries, accounting for almost a 10th of the industry.

Meanwhile, from Mantralaya, the Maharashtra government's headquarters, the talk of a ban continues, and legislators in the Vidhan Sabha are talking of 'how lotteries are destroying an entire generation' and 'lotteries are evil'. So, the first step for the government was to ban the 15-minute 'two-digit' draws, incurring a revenue loss of over Rs 20 crore on this (even though the ban hadn't been implemented when bt visited the stores). However, the ban will have several caveats: It will still allow for other state lotteries to be played and not impact other types of online lotteries at all, with the fallout confined to just two companies, Martin & Sugal and The Money, who had licences to operate such lotteries. That said, storeowners like Reddy point out that half their business comes from such 'two-digit' lotteries.

No lottery shop that this correspondent visited had any underage players (as some people have accused). A majority of them seemed to be white-collar workers, many of them daily players, addicted to the hope of a big pay day, but nothing untoward. Hope, it seems, burns eternal in the lottery store.

Before leaving, this correspondent decided to try his hand at the sport as well. So a ticket for the 6.45 p.m. draw was purchased and a number was picked. The excitement and anticipation and the possibility of winning a thousand rupees was quite good fun. But, of course, a poor journalist always has rotten luck. Maybe tomorrow then?