The lack of transparency and credibility of paper lottery has led many governments across countries to introduce online lottery. While the paper lottery caters to the lower income groups the low average price per ticket, this is a market with high volumes but low margins for the governments selling these lotteries. Online lottery has managed to attract players from middle and upper income groups, thus expanding the market. Online lotteries have also offered a source of huge revenue to cash starved state governments. The tickets are priced higher than the paper lottery and the prize money on offer is also higher. The state share of the revenues is higher than that of paper lotteries, provided the states have been prudent enough to negotiate the best terms. The states do not possess the technical expertise or the marketing acumen to run these lotteries and have appointed sole agents for this purpose. The agreements entered by the state government provide complete freedom to the agent to set up the online lottery infrastructure and market the lotteries and at the same time maximizing revenues to the state.
Online lottery can benefit government with the following ways
The government requires funds for development and has to explore all possible avenues for generating funds. Lotteries generate millions of dollars for state treasuries, and legislators can rely on the lottery as an income source for meeting the state budget. The revenue generated can be utilized for good causes like tribal welfare, social upliftment, State Development, providing medical facilities etc.
Compared to the political struggles involved in imposing new taxes or increasing existing tax rates, a lottery is a relatively painless way to raise revenue. It has been argued for centuries that the lottery is the only “tax” which people appear happy to pay. It is an inexpensive form of amusement to the people and fund state government initiatives.
Online lottery operations generate income opportunities for vendors, lottery service providers, ticket printers, computer companies, consultants, advertisement agencies, receive direct income from state lottery projects. The Lottery trade has always provided employment to under-privileged sections like visually and physically handicapped persons.
Control of Revenue Leakage due to illegal betting:
It has been established that prohibition leads to a parallel and underground market, where the Government gets no revenue and players are at the mercy of unscrupulous traders. Such illicit activities give rise to anti-social activities and corruption. With the introduction of Online gaming and lotteries, controlled and owned by the government such illegal betting will be controlled which will eventually curb the govt’s revenue leakage.
Solution to Problem Gambling:
Paper Lottery can never have aspirational value. With papaer lottery, the objective is to win small and win more and this creates an issue of Problem Gambling where people spent whole day in Lottery shops trying their luck which could result in wiping out all their savings. Paper Lottery or Internet Lottery offers large number of draws in a day to keep the customer hooked up continuously resulting in Problem Gambling. Online lottery overcomes this issue with transparent operations and fair opportunity to win big.