Try your luck! Buy lotteries on your mobile phone
Kamlesh Vijay, group CEO, Sugal & Damani
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Sugal & Damani, a prominent state lotteries distributor, has decided to vend raffle tickets on mobile phones. The company will roll out its mobile platform (app) ‘Luckykhel’ over the next few days.
“No trade can ignore the digital medium. There’ll be 468 million smartphone users by 2021,” says Kamlesh Vijay, group CEO of Sugal & Damani (S&D).
“We’d be able to reach out to more customers via mobile phones. Our costs would go down and we’ll be able to sell lotteries round the clock,” Vijay tells ET in an exclusive interview.
S&D claim to have over 75% market share in online lottery business, over 20,000 point-of-sale terminals across lottery-friendly states and 15 million transactions per day. The company posted a turnover of close to Rs 15,000 crore last fiscal.
“By opening a mobile distribution channel, we’re trying to bring on board many more customers. We’re targeting anybody who is above 18 years of age,” says Vijay.
How will app-based lotteries work?
These lotteries would be sold on mobile phones – via a mobile app. We prefer to call them digital lotteries though… You simply have to download the app on your mobile phone and register with us for availing the services. We’ll roll out first on android phones, and later on other platforms. Users can participate (buy lotteries) by linking up their bank accounts or e-wallets. We’ve put in place adequate KYC (know-your-customer) process and other security features as well.
What are your KYC requirements?
Every new user has to register themselves on the platform. They have to submit bank account details (which may also be used for transferring ‘winnings’ or prize money), address and age proof documents.
What type of lotteries would you sell?
To begin with, we’ll have nine different variants of lotteries – lottos, powerball, lucky-4s, magic lottos etc. The price of these tickets could be as low as Rs 2, and can go all the way upto Rs 25. The prize money or winnings could be any sum between a few hundred rupees to over Rs 2.5 crore. Some of our high-priced tickets could also be jackpots… The draws could be on hourly, daily or weekly-basis; tickets of higher denomination may be drawn once a week.
Which state lotteries would you sell via the app?
We’ll start with Goa, Sikkim and Arunachal Pradesh state lotteries; we’re also trying to get Punjab and Maharashtra on board. Over the next one year, mobile lotteries would account for 5 – 10% of overall lottery sales in India; in 5 years’ time, it could be as high as 40 – 45%.
Many states do not allow sale of lotteries. How will you stop ‘user seepages’ into non-lottery friendly states?
Currently nine states – Maharashtra, West Bengal, Punjab, Mizoram, Arunachal Pradesh, Sikkim, Assam, Goa and Kerala – raise funds via sale of lotteries. Of this, only Kerala doesn’t allow marketing of lotteries issued by other state governments. All other eight states allow cross-selling of lotteries. We’ve devised a two-way solution to stop seepages into non-(lottery)-friendly states. Firstly, we’ve installed geo-location blockages on the app; secondly, we do not give participation rights to users residing in non-(lottery)-friendly states. These measure would control seepages.
Would you be able to sell lotteries in overseas markets.
No, RBI doesn’t allow us to do that… Foreign national may register with us, but would be barred from participating.
This can get quite addictive for users…
Not at all. We follow the ‘responsible gaming principles’ set forth by the World Lotteries Association. We’ll not allow under-aged individuals (less than 18 years) to participate. We’ll also put in place a monitoring system to warn / block compulsive lottery-buyers.
What will happen to the 7 lakh physical lottery-sellers who vend tickets for a living?
Physical lotteries would continue unabated…. From a distributors point of view, we need digital presence; but paper lotteries will continue to be an important distribution route for us. A mobile outlet would help us popularise lotteries among people. It will also give a leg up to physical lotteries.
How are lotteries helping state governments?
Lotteries are a Rs 50,000-crore business in India. In 2017-18, the nine “lottery-friendly” states collected close to Rs 3950 crore as GST (on lottery sales). As per current GST structure, interstate sale of lotteries attracts 28% tax while intrastate sales come under the 12% bracket. That aside, by selling lotteries, these states collected close to Rs 1853 crore. That’s a whopping Rs 5800 crore in net collections… Lottery is a good way to augment governmental revenues. The money that comes in, can be used to run various social welfare programmes such as Ayushman Bharat or ‘education-for-all.’ If more states decide to float lottery schemes, we’ll be able to raise at least Rs 50,000 crore. Countries such as China and UK use lotteries to run their social welfare programmes.