» Business » Paper lotteries lose out to online jackpots

Paper lotteries lose out to online jackpots

By Aparna Krishnakumar in Mumbai
November 20, 2004 11:08 IST
Get Rediff News in your Inbox:
Sales of paper lotteries declined at least 40 per cent during the first 10 days of festive season.

Paras Mody is a lottery ticket agent in south Mumbai. He says that he had to cut costs by sacking staff and reducing the number of lottery ticket draws. "This is the only way that we can sustain ourselves," says Mody.

Mody's position reflects a startling trend -- nationwide, paper lottery tickets are becoming passe. Lottery companies -- or at least those that hawk paper lottery tickets -- are no longer hitting the jackpot.

Their sales have declined by at least 40 per cent during the seven to 10 days of the festive season, something that confirms the steady decline in the popularity of paper lottery tickets.

Other lottery agents back the point. Raju Shah, a lottery agent in Mulund, the north Mumbai suburb, says that he has managed to sell 7,000 tickets this festival season, just 2,000 more than what he sells on other days.

For Mysore Sales International Limited, the authorised sellers for the Karnataka state lottery ,the Diwali season has been so dismal that no draw has been held at all. Dealers say, overall, sales of paper lotteries during the year have crashed by 50 per cent.

The paper lottery business is facing serious competition from online lotteries that have sprung up in the last two years. Online lotteries such as the Subhash Chandra-promoted Playwin, the south India-based Martin group's Smartwin and Shapoorji Pallonji's Dhan Dhana Dhan are overtaking paper-based lotteries.

The multiple daily draws and hectic ticket sales at online lottery centres have created virtual gambling dens in West Bengal and Maharashtra. According to industry estimates, online lottery sales have soared by 70 per cent this year.

Paper lotteries promote themselves by offering bumper festival draws. The online ones don't even do this -- but yet are the rage. At festival time, they merely raise the stakes, something that automatically translates into increased ticket sales. For example, last week Playwin had three jackpots of Rs 2.9 crore (Rs 29 million), Rs 3.6 crore (Rs 36 million) and Rs 2.15 crore (Rs 21.5 million),

respectively. Smartwin will be coming up with jackpots next month.

Five years ago, paper based lotteries used to contribute as much as Rs 30,000 crore (Rs 300 billion) to the Rs 50,000 crore (Rs 500 billion) national lottery business (the rest was accounted for by "matkas" or unorganised sector lotteries and local community or "instant" lotteries), according to Usman Fayaz, CEO and president of the All India Lottery Federation. Today, their share in the national figure is just around 40 per cent.

When online lotteries were launched in 2002-2003,they reported sales of Rs 2,516 crore (Rs 25.16 billion). Since then, sales have sky-rocketed. Playwin alone expects to earn more than Rs 1,800 crore (Rs 18 billion) this year in Kolkata alone. Fayaz, who's also president and CEO of the Martin group, predicts that online lottery sales will overtake paper lottery ticket sales within the next three years.

So why have online lotteries caught on? Says Fayaz, "Online lotteries have done away with distribution and the collection hassles of tickets for agents. The results are more trasparent and this has made lottery agents more acountable. Online lotteries are based on number combinations. So the number of winners is higher."

In contrast, a lottery ticket has fixed numbers assigned to it, usually by state governments, and these cannot be changed later. So only one person can win the lottery.

Online lottery results are also transparent -- one can watch them on television as well as on the Internet. Tickets can be bought from a host of vendors, ranging from a local panwallah to retail showrooms. All these have contributed to the popularity of online lotteries.

What of the future? Paper lotteries could eventually fade away, victims of the march of technology and losers in the lottery of life.

Additional reporting by Our Kolkata and Bangalore Bureaus

Get Rediff News in your Inbox:
Aparna Krishnakumar in Mumbai

Moneywiz Live!