Meghalaya Cabinet Approves State Lottery Rules

The Meghalaya Cabinet approved the rules for state lottery on Monday. The rules define how the lottery will be conducted in the state to help the state generate revenues. Meghalaya will finally revive the state Lottery after it was shut down in 2005.

In the year 2017, the then Chief Minister of Meghalaya announced that Excise Registration Taxation Stamps Department (ERTS) department notified the new rules for lottery. He also indicated that the bidding process will start to appoint a distributor for the state’s lottery.

James K. Sangma, Meghalaya’s Home minister, said that as Meghalaya Lottery Rules 2019 have been approved now, the taxation department with work out the lottery process. Tenders will also be floated for the same.

Sangma announced that both paper and online lottery will be introduced. This will enable participation by people from all the Indian states where lottery is legal.

Before this, online Meghalaya state lottery was introduced in 2001. Back then, an agreement was signed with MS Associates, a firm that reportedly belonged to former Lok Sabha Congress MP Mani Kumar Subba.

MS Associates was supposed to pay a guaranteed Rs. 3 crore to the state exchequer in the first year. This amount was increased to Rs 12 crore in the year 2002, after the government faced opposition from various quarters. MS Associates stopped operations in 2005 and failed to pay the balance sum of Rs 35.08 crore (out of Rs 54.08 crore due from 2002 to 2005), as per the Comptroller and Auditor General of India (CAG).

As per a report, the CAG also criticized the state government for continuing to pay the lottery department staff from the year 2008 to 2016, with no assignment of work duties to the said staff. This caused a loss of another Rs. 5.69 crores to the exchequer.

Since 2005, the state of Meghalaya has not been able to revive the state lottery, up until now.

Earlier this year, the Meghalaya state was also exploring the possibility of permitting licensed casinos in the state to fillip the state’s tourism. If the proposal is put into action, the locals will be banned from entering and playing in casinos.

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Manipur government to reintroduce lotteries

The Manipur government is working on a plan to reintroduce lottery schemes in a bid to generate revenue for the state, as per the state’s deputy chief minister Yumnam Joykumar Singh.

Joykumar, who holds the Finance portfolio stated that the move will fetch the state government around Rs. 100 crores in revenue annually. He added that it is not still decided whether it would be sold in the state or outside the state or both inside and outside the state.

Joykumar made the assertion in the state legislative assembly in reply to a supplementary question posed by Congress MLA Surjakumar Okram, as per local media reports.

The exact details of the proposal to introduce lottery schemes and timelines as to by when the plan would be implemented were not revealed.

Nine states currently run lottery schemes, either through the state machinery or through private companies appointed as distributors or marketing agents. The states/territories that currently run lottery schemes are Maharashtra, Goa, Punjab, West Bengal, Kerala, Nagaland, Sikkim, Arunachal Pradesh and Bodoland Territorial Council.

Reportedly, the Meghalaya government has also commenced the process of starting their own lottery schemes. However, the process has not yet been completed due to controversies surrounding the companies which the state government plans to appoint as its marketing agent/distributor.


Meghalaya government mulls proposal to permit licensed casinos in state

The Meghalaya government is exploring the possibility of permitting licensed casinos in the state, as per a news report in local daily The Shillong Times.

As per the Shillong Times report, the administration is keen to see a casino come up at Byrnihat in the Ri-Bhoi district of the state.  According to unnamed sources quoted by the local press, the proposal is still at the initial stage, although the political bosses governing the state are keen to see that idea materialises and have directed the concerned departments to start working on a plan to implement the concept.

Sources have also stated that the state government is pushing the concept of casinos to give a fillip to tourism in the state and should the proposal go ahead, locals would be banned from entering and playing in casinos, just like the prevailing regulations in Nepal and Sikkim.

While there is a perceptible interest to permit casinos, the government is reportedly treading cautiously on the proposal due to the social, religious and moral consequences and plausible backlash from a section of the society.

Any proposal to permit casinos in the state would probably require legislative amendments to the prevailing anti-gambling legislation, i.e. the Meghalaya Prevention of Gambling Act, 1970.

The Meghalaya government is also reportedly keen to restart its state lottery and appoint a private company to distribute and market its lotteries across India, in states where lotteries are permitted.


Meghalaya government to restart lotteries, issue tender to appoint distributors

Meghalaya Chief Minister Mukul Sangma announced that the Excise Registration Taxation Stamps Department (ERTS) department has notified the new lottery rules and that there would soon be a bidding process to appoint a distributor to market the state government’s lotteries in states where such lottery sales are permitted.

Sangma added that his government would prefer paper lotteries over online lotteries and the same would be in accordance with the central law, Lotteries (Regulation) Act, 1998 and rules framed thereunder.

The Meghalaya government had introduced online lottery schemes in the year 2001 and signed an agreement with a firm, MS Associates, to run the lottery with a guaranteed Rs 3 crore (which was later increased to Rs. 12 crore) for the exchequer in the first year. The firm reportedly belonged to former Lok Sabha Congress MP Mani Kumar Subba.

However, in 2005, the firm stopped operating the online lottery and did not pay dues. Despite several attempts, the firm is yet to pay the amount.

The Comptroller and Auditor General of India (CAG) had noted that MS Associates had outstanding dues of Rs. 35.08 crores that it had not paid.

Interestingly, the CAG in its recent report had also severely criticised the Meghalaya government for paying the department of state lotteries officials for eight years after the state had stopped selling lotteries, from 2008 to 2016, without assigning any work to them or transferring them to other divisions within the ERTS department. This oversight of the state government had caused a loss of Rs. 5.69 crores to the exchequer as per the CAG report.

CAG has consistently criticised the opaque process of awarding tenders to private lottery distributors and the flagrant non-compliance of several laws by private lottery companies.

According to the Lotteries (Regulation) Act and Supreme Court judgments, once a state decides to sell its own lotteries, it has to allow sale of other state lotteries within its territory. Currently, Kerala, Maharashtra, Mizoram, Nagaland, Sikkim, Arunachal Pradesh, West Bengal, Punjab and Bodoland Territorial Council permit sale of lotteries.

Private lottery distributors have been grappling with a 28% GST on the face value of tickets, which they feel is unfair and will spell the death knell of the industry.

Several companies have approached the Sikkim, Gauhati, Calcutta and Bombay High Courts against the decision of the GST Council to impose a 28% tax on the face value of tickets. The Supreme Court recently rejected the central government’s plea to transfer these cases to a single court.