Bhutan Lottery Limited makes Rs. 2 crore profit

Bhutan Lottery Limited (BLL) the Bhutan government’s state owned lottery company has made a profit of 20.9 million Ngultrum (around Rs. 2.9 crores), as per local media reports.

As per news reports, BLL has also declared a 11% dividend for the year amount to 6.16 million Ngultrum (around Rs. 61 lakhs).

The Bhutanese lottery was officially launched on August 8, 2016 but the monthly lottery schemes started only at the end of November 2016 with monthly lottery scheme Phuensum Dharim. In November 2017, BLL launched its second scheme, the instant-win lottery Thuensum Scratch.

Bhutan Lottery Limited has also stated that it will be launching newer lottery schemes including instant lottery and online lottery. The Himalayan state is also contemplating marketing and selling lottery schemes in India.

Notably, as per the Agreement on Trade, Commerce and Transit between the Indian and Bhutanese Government, all trade and commerce between the two countries is free.  The Protocol to the Trade Agreement clarifies that free trade and commerce includes the sale of Bhutanese lottery tickets in India and vice-versa, subject to relevant applicable laws in both the countries that are for the time being in force.

The Indo-Bhutan Trade Agreement, Protocol to the Trade Agreement and the Lotteries (Regulation) Act, 1998 along with judgments of the Indian Supreme Court indicates that Bhutanese lotteries can be sold in states which conduct their own lotteries.

Currently, states like Maharashtra, Kerala, West Bengal, Goa, Nagaland, Sikkim, Mizoram etc. allow sale of lotteries and by virtue of India’s trade agreement with Bhutan, sale of BLL tickets will be permitted in these states.


New Bhutanese government to resume lottery business, raise issue of resumption of lotteries with Indian government

Bhutan witnessed a surprise political change this month with the opposition People’s Democratic Party (PDP) defeating Druk Phuensum Tshogpa (DPT) in the general elections held last month.

One of the prominent election issues taken up by PDP leaders was the resumption of the state-run lottery business.  Bhutan ran a a state-run lottery since 1987 which was a huge source of income for the small Himalayan state. According to estimates, around Rs. 950 crores of annual revenue can be generated by sale of Bhutanese lotteries across India. However in 2011, the Bhutan state lottery was shut down after allegations of irregularities and appeals by the Kerala government to the Indian Central government to ban Bhutanese lotteries.

Commenting on a question regarding resumption of lotteries in an exclusive interview to Hindustan Times, leader of PDP and Bhutan’s future Prime Minister Tshering Tobgay said: “Our party pledged to revive the lottery business which was a substantial source of revenue for the Royal Government of Bhutan. At the same time, we will ensure that the lottery business is conducted in a lawful manner and all proceeds go to our education and health sectors.”

New Bhutan govt to resume lottery service in India?

It may be remembered that Bhutan enjoys a peculiar trade-arrangement with India and is the only foreign country which is entitled  to sell lotteries in India by virtue of the Agreement on Trade, Commerce and Transit between the two nations. Under Article 1 of the Agreement, there is to be free trade and commerce between India and Bhutan.  With reference to this Article, the Protocol to the Agreement states: “For the purpose of this Agreement, the term ‘free trade and commerce’ in Article I shall be understood to include within its scope sale of Bhutan lottery tickets in India and the sale of Indian Government or State lottery tickets in Bhutan, subject to the relevant laws which may be in force in the territories of the Kingdom of Bhutan and India, as the case may be.”

Thus, Bhutan is entitled to sell lotteries in India in any state if that state government allows sale of lotteries from other states. Under the Central Lotteries (Regulation) Act, 1998 the state government can either allow lotteries from other states or ban them. Thus, Bhutan is virtually considered to be an Indian state for the purposes of lottery business due to the aforementioned agreement and state governments which allow lottery business in general, would also have to allow Bhutanese lotteries as well.

Legal & Regulatory

Legal & regulatory severely restricts gambling activities in South Asia- studying the regulatory model of South Asian nations

This post will describe the legal and regulatory environment in South Asian nations as not much is known about the gaming laws regulating wagering activities in countries neighbouring India. An original version of this article was first published on the website Bookmakersreview and is re-posted with prior consent.

India: This website has dealt with most questions concerning gambling laws comprehensively and an introduction on gambling laws can be accessed here. However, the regulatory, political and legal environment governing gambling laws is reiterated here for the benefit of readers.

Most states in India, with the exception of the two small tourist states of Goa and Sikkim, prohibit all forms of gambling. A casino resort has been approved in the Union territory of Daman in western India but it is not functional as of now. Various other states have tried to legalize gambling and betting at various points of times in the past starting with a proposal by the Maharashtra government to legalize gambling and betting in 1976.

Recently, the state of Punjab in Northern India started looking to legalize casinos though the proposal has meet with stiff resistance from religious groups and political parties Though cricket betting and other forms of gambling activities is rampant in India and is considered to be a multi-billion dollar industry, most of it happens illegally and is run by criminal syndicates due to archaic laws and regulations preventing gambling and wagering. The apprehension to regulate and legalize gambling/betting can be attributed to the influence of conservative religious and social groups as well as the social stigma attached to these activities which are considered pernicious and addictive.

However, the exceptions to the almost blanket prohibition on gambling activities is lotteries and betting on horse-racing. By a statute of the Parliament – the Lotteries (Regulation) Act of 1998 – it is legal for state governments to license and authorize lottery tickets and thus around 11 out of 29 states in India allow and license lottery tickets to be sold. A second exception is for betting on horse-racing and states such as Maharashtra, Delhi, Karnataka, Tamil Nadu allow betting on horse-racing in race-courses with licensed bookmakers. Thus, betting on horse-racing is a popular activity in major cities such as Mumbai, Delhi and Chennai.

Bhutan: Bhutan is a tiny nation in the Himalayan region to the east of India. Until recently it was a monarchy and though wagering activities are prevalent in Bhutanese society, such activities are considered illegal and are a criminal offence. Again the Bhutan government has created an exception for lotteries and the Bhutanese government regularly authorises lottery tickets to be licensed and sold including in India.

Nepal: The Nepalese government with the intention of promoting tourism has allowed casinos in five state hotels since 1967 and there are various casinos run by foreign entrepreneurs in Nepal. However, entry to these casinos is restricted to foreign (non-Nepalese) citizens above 21-years of age. Other forms of gambling and wagering are prohibited by law and it is a criminal offence to indulge in gambling and wagering activities. However, with the abdication of the monarch and political turmoil in the country with governments frequently changing and the left-wing Maoists having taken control of the state, the country is considered to be unsafe for tourists. Any regulatory changes in this country are unlikely in light of this political turmoil.

Sri Lanka: Sri Lanka, an island state to the south of India has had a liberal approach to gambling and betting activities. The state has allowed betting and casinos since 1988 but a Bill passed by the Sri Lankan Parliament in 2010 imposes stringent conditions for setting-up of casinos and a criminal offence to carry-out gambling activities without requisite license. Though Buddhist political parties and religious groups have opposed the move to regulate and allow casinos, after the end of the civil war, Sri Lanka is seen as an emerging economy and various top foreign companies, including Las Vegas Sands Corp and its Chairman Sheldon Adelson, are said to be investing in casinos in Sri Lanka.

Pakistan: Pakistan is a conservative religious society and an Islamic state so gambling is seen as an evil activity which is prohibited by law and even forbidden as per the Quran.  The Prevention of Gambling Act of 1977 prevents all forms of betting and wagering activities in Pakistan and makes any such activity in contravention of the Act a criminal offence. With the country marred in violence and the presence of extremist Talibanic elements who believe in Sharia law,  it is extremely unlikely that there will be any change in the gambling laws of the country and all forms of wagering activities shall remain prohibited in the foreseeable future.

Bangladesh: Bangladesh is a country to the east of India and has inherited the common law system and its Public Gambling Act of 1867 is very similar and almost identical to the Indian Public Gambling Act of 1867. Both India and Bangladeshi laws prohibit all forms of gambling and betting with the exception of lotteries and betting on horse-races. 

Note: The original version of the article published on Bookmakersreview can be accessed here.

Legal & Regulatory

Recent Kerala HC decision on lotteries

The Kerala High Court recently announced its verdict on lotteries from outside the state (notably Sikkim and Bhutan lotteries). A litigant secured an order from the Kerala High Court to restrict the number of draws to once a week.  However, a recent division bench order of the Kerala High Court has now vacated the earlier order.  It said that the government could have draws under different schemes. The Court also directed the Kerala government to collect advance tax from Megha distributors, promoters of Bhutan lotteries in Kerala. The issue of Sikkim and Bhutan lotteries being drawn is a matter of continuous controversy not just in Kerala but across India. Lotteries sponsored by the government of Sikkim, the Playwin lotteries (a company owned by the Essel Group) are the largest selling lotteries in India. The annual turnover of Playwin is over US $ 150 million (approximately Rs. 6,750 crores). We shall now look into the various legal, social, political and economic issues involved.

Legal issues: Respective State governments have the power to prohibit lotteries conducted, authorised or promoted by any other State under Section 5 of The Lotteries (Regulation) Act, 1998. There are various conditions which the State governments have to comply under the Central government enacted Lotteries (Regulation) Act. Some of these conditions are: the state government must print the tickets, the proceeds of the ticket sale must be credited into the public account of the state, the state government shall conduct the draw of all lotteries and no lottery shall have more than one draw per week.

The two most contentious in this legislation are: restricting the draws to one per week and prohibiting lotteries from other states. The Kerala High Court while passing the order said that the state government can have more than one draw per week under different schemes.

However, while there have been vociferous demands in Kerala to ban the ‘outside’ lotteries both the State and the Central Government are reluctant to ban these profitable lotteries promoted by powerful individuals. While it is the State Government’s prerogative to prohibit lotteries authorised by other states, the state government has conveniently passed on the blame to the Central government which has the power to prohibit organisation of lotteries, only if the said lotteries are in breach of the above-mentioned conditions.

Political issues: Kerala accounts for just 4 per cent of the lottery ticket sales in the State while Sikkim and Bhutan lotteries account for most of the remaining 96 per cent sales. Most of these Sikkim and Bhutan lotteries are run by promoters like Coimbatore based Santiago Martin, a man with friends in all political parties and the treasurer of the All India Federation of Lottery Trade and Allied Industries (AIFLTAI).   Law enforcement agencies suspect Martin of being the king pin of an illegal lottery racket worth thousands of crores. Martin has many cases of illegal lotteries and irregularities in his legitimate lottery business against him in Tamil Nadu.  However, with Abhishek Manu Singhvi- Congress spokesperson appearing on behalf of Martin owned Megha distributors and Tamil Nadu Advocate General stepping in to defend Martin, it seems that Martin’s remarkable clout will ensure that his lottery-business is never affected.

Economic and Social Issues: Lotteries are almost a part of Kerala’s landscape. Keralites spend more than Rs. 15,000 crore on lotteries every year. Though Indian Courts have on numerous occasions held that the business of conducting/promoting lotteries is not included under freedom of trade and profession; more than 400,000 people in Kerala alone depend on lottery-ticket selling for their livelihood.   Any measure to ban lotteries would thus be seen as an attempt to deprive the poor of their livelihoods.

List of news articles used: Bummer Ticket, p. 12 Outlook dated 13th September, 2010