Lotteries are an important part of Bharat gaming culture and a sizable industry. With lockdowns and bans in many States, there has been a rollback to black markets and offshore sites. The answer lies in a definitive digital transition for the sector, with mobile apps and online services. An industry research delves into the scope of India's favourite game.
Study Reveals Scope and Specifics of Indian Lotteries
There are few detailed reports on any of the legal (or illegal) lotteries in the Union, while even fewer manage to determine the actual size and potential of the market. An industry to be reckoned with – in both economic and social terms – Indian lotteries differ mostly by State but also by their offline or online operation.
A recent analysis of the lottery industry in India sheds some light into its actual state and prospects across the nation. Segmenting the market by demographics, legal and technological demands, the study draws a comparison between traditional paper-based lottery and its online equivalent.
The typical consumer of any paper and onlinelottery in India is reported as a young male (around 30) living in a big city. That is one of only several general traits of a complex market. In fact, there are 13 States that allow and regulate their own Government drawings and those that do not – or even explicitly forbid lottery.
The ENV Media research exposes the monthly search volumes for lottery-related products, with the top 30 keyword combinations surpassing 8 million monthly lookups. Tier-1 cities and larger states have more weight, naturally. However, States which do not have their own legal lottery (whether paper-based or not) dominate Top 15 rankings with more than half of all online user volumes.
Put simply, large areas of the nation have no access to legal lotteries and are likely to search for an alternative. The choice is usually between a black market lottery and an online one.
The study also cites a KPMGreport that around 12% of the population is familiar enough with English to use it "interchangeably", with major languages like Tamil, Bengali, Telugu and Marathi offering more online traction. Nevertheless, cross-state visibility and trustworthiness is hard to beat with an English-language online lottery. What's more, the young and tech-savvy generation is the one driving online markets forward.
Lottery Market Size Estimate and Immediate Potential
Even though both public and private operators provide fragmented data (if any), the ENV Media report makes available some substantial industry references. Around 10 lakh people sell lottery tickets for a living across India. These small retailers have reported a sharp decline in sales in recent years, ever since a 28% GST was imposed on lottery tickets in 2017.
Pre-GST market volumes are given anywhere between Rs 50,000 crore and Rs 60,000 crore, dropping to a third of that due to the comeback of "hawala" transactions and rise in offshore lottery operations.
Strong Competition from Illegal Lotteries and Satta Matka
Many retail points on the grounds used to offer the cheapest tickets around. Even those were hit by the decline, with some forced to close, others tempted to turn to fake or illegal ticket sales. Should states recognise the importance of fighting black satta markets, they would have to consider both a flexible GST and more digital operations, inevitably.
One of the industry's largest operators, Sugal & Damani, estimates that illegal lotteries account for up to half of the market, even 60% - valued at $2.6 billion per year. These figures place the total lottery market size at around $5 billion.
Double in Size while Gaining Transparency
Real-money gamers who play online are expected to amount to 150 million in 2023, according to a recent report by EY-India. On the other hand, the lottery remains the most popular gambling form in India, ranging from 50% in some States to as much as 67.8% (in Goa, a traditional market) closely followed up with Cricket and of course cricket betting online!
ENV Media reveals statistics from Kerala as well, a State with a hugely successful legal lottery. It sells around 80 million lottery tickets weekly to its 20 million adults, roughly 200 tickets per adult annually. Should we maintain the above proportions and lottery popularity (50% of money gamers), we would have 75 million players purchasing around 15 billion lottery tickets online each year.
Online tickets cannot possibly cost below Rs 50, as even UPI has limited gaming transactions below that amount in late April of this year. This would bring total annual turnover to Rs 750 billion (Rs 75,000 crore) or over $10 billion.
Considering technical limitations and cultural preferences, those are reasonable yet conservative numbers for a market which has more than 750 million online users even now. In the short term, they would practically double national lottery turnovers and bring much of the illegal market to light.
The Way Forward
While paper lottery is still the norm in India, online operations will make draws more efficient and universally accessible. Online demand is likely to keep rising, with the digital boom and people's daily habits altered permanently at this point.
An Australian study showed that lotteries are even more relevant in a crisis as they can "fuel optimism" among users. In the meantime, the UK National lottery managed to largely make up the drop in physical sales by transitioning to online and mobile operations.
With online lotteries, India also has the chance to achieve better distribution, control and safety standards, solving payment and taxation issues along the way.