Lottery companies shut operations in Bengal

In 2011, when West Bengal imposed hefty taxes on lotteries, the state expected the business of gamble to accrue some revenue for its cash-strapped coffers. However, much to the disappointment of the state government, instead of paying hefty taxes to the state government, the lottery companies have decided to shun West Bengal.

In the last one year, all the online lottery companies in the state have shut operation in the state. Before 2011, there were close to ten lottery companies operating in West Bengal, with rough estimates suggesting a daily sales of about Rs 3 crore, according to Surojit Kumar Bose, former president of West Bengal Lottery Association.

 

With the online lottery business almost wiped-out of state, even the association has now dismantled.

In a bid to improve West Bengal’s poor revenue growth, in July 2011, the state government issued a notification that imposed a tax of Rs 1 lakh for each draw and Rs 5 lakh for bumper draws. Under the new tax structure, the government realised about Rs 50 crore during the four-month period (July-October). Subsequently, the state government on November 22 notified a five-fold increase in tax at Rs 5 lakh a draw. In the Left Front regime, no tax was imposed on lotteries.

Some of the prominent lottery companies who were operating in West Bengal included the one promoted by the Sugal & Damani (SND), Smartwin lotteries, promoted by the Martin Group and Playwin lottery.

“We suspended all our operations in the state about four months back. West Bengal contributed significantly to our revenues. At present all online lotteries have suspended operations in the state. We are negotiating with the state government for some solution,” said one executive of a major online lottery company.

Interestingly, one of the motives of the West Bengal government in imposing a hefty tax on online lotteries was to clamp down on illegal online lotteries, as well as enhance the revenues. However, West Bengal has emerged a favourable destination for shady investment companies and chit funds.