Lotteries: Mass gambling that brings in camouflaged tax revenue
Posted on February 3rd, 2017

By Rohana R. Wasala

We sometimes talk about national scourges such as the current crassly perverted political culture, rank corruption in high places, abject dependence on and implicit faith in astrology and other occult practices, rampant abuse of drugs and drinking, smoking, and gambling, all of which, due to the existing circumstances, get lashed into one single instrument of torture that is being liberally applied on the backs of hapless Sri Lankans. The purpose of this article is to focus on a form of mass gambling that is hardly recognized as such by the general public:  state sponsored lotteries.

Countless lotteries are held regularly in many countries of the world including the richest and the poorest among them. However, the poorer the people in any country, the more popular and the more addictive lotteries get; and therefore, lotteries have a tendency to become more prevalent in less well-to-do countries. In Sri Lanka, where the state conducts lotteries as a monopoly, the level of gambling addiction is very high as evident from easily observable facts such as the wide variety of lotteries available, the massive high-cost advertising that is devoted for their promotion, the large number of ticket sellers, reportedly 500,000, who support their families selling lottery tickets for a living to a population of just 20 million. In America, the polar opposite of Sri Lanka in economic terms, problem gambling occurs only among 3 to 4% of its nearly 320 million population, according to a study conducted in that country some time back.

All forms of gambling are universally considered immoral. In our culture, gambling is condemned as a vice that is akin to drinking: hence the common Sinhala binomial sura soodu” (drinking and gambling). There is sound logic behind this  assigning of the two apparently unrelated activities to the same category: Both are addictive, and both lead to an individual’s ill health in addition to economic hardships. Excessive drinking impairs both physical and mental health of the drinker (e.g., it can cause liver problems, brain malfunctioning, and emotional imbalances). Gambling does not usually put a person in physical danger, unless it takes the form of a game of chance like Russian roulette! But, gambling, like drinking, often becomes an emotional issue, putting a person’s mental health in jeopardy. Some people justify their drinking as a means of dealing with stressful situations such as love-breaks, death of a near and dear one, domestic problems, frustration at the workplace, etc. Similarly, problem gamblers often see gambling as a way to alleviate emotional stress. Gambling, like drinking again, can give the addicted person a temporary feeling of euphoria, which ultimately pushes them towards further indulgence in the pernicious habit, increasing its evil potential.

The twin evils of drinking and gambling (both legal and illegal) have been destroying our society from within for over a century already. After all, our independence struggle started in the form of the temperance movement. Unfortunately, today, not much real concern appears to be shown because drinking and gambling (in the form of state sponsored lotteries) are a source of camouflaged tax revenue for the government. In recent times (I mean, over the past sixty years) the cash-strapped nature of Sri Lanka’s economy  has turned dependence on tax revenue collected on lotteries and on licensed drinking (bars/wine stores) into a necessary evil. An inevitable associate to gambling and drinking is the most harmful smoking habit, which fortunately seems to be in decline to some extent at present, but not to the level that would render it too insignificant to be considered worth taxing.

The state sponsored lotteries industry has a fairly long history in independent Sri Lanka. The earliest government lottery was the Hospitals Lottery commenced under the Hospitals Lotteries Act passed on February 18, 1955. Its purpose was to procure funds for the development of hospitals. This act was repealed and the National Lotteries Board was created on January 10, 1964 with a view to collecting more money for the state’s development activities. Nineteen years later a second lotteries board was established. This is the Development Lotteries Board incorporated on January 19, 1983. These two bodies conduct many types of lotteries in Sri Lanka. There are draws almost every day of the week, often shown live on TV. The times this happens, the whole country becomes one massive gambling den! Fortunately or unfortunately, the poor gamblers don’t know that they are gambling; neither do they realize that their immoral desire for wealth that they have not earned or worked for is landing them in a situation where they are being collectively robbed of what little they have actually earned by the sweat of their brow, a simple truth that is cunningly buried by the sponsors.

The Vision of the National Lotteries Board is to be The leader creating state investment through the contribution of all communities aimed at socio-economic development of the country”. Its Mission is to be A socially responsible esteemed organization marching towards a wonderful country with a competent and committed staff whilst earning the customer trust ensuring achievement of their aspirations through the introduction of innovative lotteries using modern technology”.

What actually happens is the exact opposite of what these visions and missions falsely promise. It was claimed that revenue fell by some 45% when recently the price of a sweep ticket was raised from Rs 20 to Rs 30. This reveals that a large number of regular sweep ticket buyers (i.e., the players of this seemingly innocuous game of chance) can ill afford the ‘luxury’ of paying an extra ten rupees for a lottery ticket. The raise in price was meant to increase the tax earnings on the lotteries. This happened in spite of a widespread outcry against exorbitant taxes on the poor imposed under the new economic model introduced by the present rulers. Probably, however, few common people see a connection between lotteries and taxes. In reality, lotteries are heavily taxed consumer products. Lottery taxes are taxes levied by politicians who usually campaign against taxes on the poor, as economists characterize them (those taxes).  American Marxian economist Professor Richard D. Woolff says: Simply put, lotteries take the most from those who can least afford it”. In America, it is the poorest, least educated people who spend the most on lotteries.

Although lotteries are allegedly being used to  promote investment and development, a lot more money than what is incidentally made available for such objectives is actually siphoned off from the country’s productive economy as a whole due to the lottery business. In an economy like ours unequal distribution of wealth is a fundamental problem. Its solution involves promoting economic growth that allows for redistribution of money down the economic ladder. The lottery industry does the opposite: the money gets redistributed up the economic ladder as a concomitant.

TV ads show frustrated poverty stricken young persons who rush to a ticket vendor, buy a lottery ticket, hit the jackpot and start living in a mansion and drive a luxury car the next day. Just like that! Most people hardly see the stupid absurdity of such advertisements; they usually forget that  only one out of millions wins that chance to rise overnight  to such dizzying heights in socioeconomic status. But sponsors of gambling usually capitalize on the ignorance of their clients by thus popularizing such fallacies about overcoming poverty.

Actually, social inequities are not a single individual’s responsibility. In a properly governed country,  productive ways are invariably available for citizens to adopt so that they are able to live the sort of decent comfortable life that modern scientific knowledge and technology makes possible. Enticing individuals in marginal circumstances to find refuge in lotteries, thereby diverting their attention from the need to take meaningful action in a well organized social context, will lead nowhere.

I am not arguing that state lotteries should be stopped forthwith. They cannot be, for obvious reasons. Neither can the liquor and cigarette businesses, which, while satisfying the public demand that there is for them, bring in considerable revenue for the government that happens to be in power at any time. All the six scourges I mentioned at the beginning, including these three, are interrelated and are mutually supportive. Raising awareness is the first step towards creating a society where these are totally eliminated or where the harm done by them is minimized. In its small way, this essay is meant to gesture towards that goal.

2 Responses to “Lotteries: Mass gambling that brings in camouflaged tax revenue”

  1. Ananda-USA Says:

    The SIX SCOURGES of Sri Lanka according to Rohana Wasana are:

    1. Corruption
    2. Gambling
    3. Alcohol drinking
    4. Narcotic drug use
    5. Smoking
    6. Occult practices including Astrology

    I would add the following vices also:

    7. Prostitution
    8. Same-sex sexual practices

  2. Dilrook Says:

    Sadly all these are on the rise. Astrological and occult practices have risen astronomically. Strangely, the younger generation is more into the latter than anyone else. Love spells seems to be highly popular going by advertisements in youth websites. Absurdity of these should be taught.

    Morality and religion failed to curb these.

    Private sector must not be allowed to run lotteries. State lotteries must be limited to a few. All liquor manufacturers and importers must be taken over by the state, run by private sector managers. Otherwise they will resort to uncontrollable immoral practices to sell their stuff. Cigarettes must be phased out. Drugs should be phased out.

    Interestingly most liquor, narcotics and cigarette businessmen are from the two largest minority groups while their biggest consumers are from the majority.

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