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Indian lottery companies posing as RGoB’s ‘Bhutan Lottery’ have been doing billions worth of lottery business since 2011: Full Story (Special Investigation)

Responding to The Bhutanese investigation Finance Minister says if proven government will discuss issue at government to government level and also take legal action

The government is in the process of forming a State Owned Enterprise (SOE) to start the Bhutan Lottery business, first in Bhutan, and then gradually after a while in India. However, before the government even starts anything, it will have to contend with many Indian lottery companies who since 2011 onwards have been falsely posing as Bhutan Lottery agents representing the Bhutan government.

17 ‘Bhutan Lottery’ companies

The Bhutanese has come across around 17 different Indian lottery companies doing billions worth of lottery business, all of whom are falsely claiming to either be the government of Bhutan lottery or using Bhutan Lottery tickets and names. Most of these companies have started from 2011 onwards after the former government closed down the Bhutan Lottery business.
The Bhutanese found that these 17 companies are all actively functioning today with daily ‘Bhutan Lottery’ draws (see list with websites on front page).
While this paper uncovered 17 such companies there are more of such companies.

Billions in prize money and Billions more in revenue

One company claiming to be the ‘Government of Bhutan Lottery’ gave away INR 163 mn as lottery prize money in just four draws in 20 days between 1st January 2016 and 20th January 2016. If this is averaged out over a year it comes to more than INR 2 bn in just prize money.
This ‘Government of Bhutan Lottery’ tickets were sold between Nu 50 to Nu 1,000 a piece. The actual amount of business done just by this one company would be around three times the Nu 2 bn prize money in a year.

Another Lottery company claiming to be the ‘Royal Government of Bhutan (RGoB)’ lottery company from September 2014 to January 2016 has given away around 217 mn in cash prizes for small lottery draws. The tickets were sold for INR 2 per ticket.

A company calling itself ‘Bhutan Jackpot’ also posing to sell Bhutan Lottery tickets in one category of its tickets gave away around a total of INR 50 mn as prize money in daily draws from 16th February 2015 to 20th January 2016.

The total figures per company would me much higher given that they all dabble in different types of so called ‘Bhutan Lottery’ tickets.

The tickets vary from ones with up to INR 100 mn prize money to smaller ones with a top prize of INR 100,000. The total prize money are in the billions with billions more as revenue for these companies, all in the name of the Bhutanese government and Bhutan.

These companies have also set up websites so that the paper lottery buyers can check for their results. These websites are highly misleading to show that they represent the Bhutan government (see website images on the front page).
In one example a lottery company has named itself as ‘Bhutan State Government Lotteries’ and has given its address as the Ministry of Finance in Tashichhodzong with a picture of the Dzong in the background.

The company website of ‘Mega Bhutan Lottery’ has pictures of Taktsang, a Royal wedding picture and the Buddha statue of Kuensel Phodrang.

Another Company called ‘Bhutan Jet Lottery’ has pictures of the Tashichhodzong, Thimphu Tsechu, Taktsang and Bhutanese currency notes on its web page.

A website www.diamondlott eries.com for viewing ‘Bhutan Lotteries’ results has the Government of Bhutan written in bold along with a replica image of an official seal.

Similarly other websites carry a similar combination of images with the Punakha Dzong and scenic photos of Bhutan.

A company called ‘Leaf Media Communication’ has also designed an android phone application called ‘Bhutan Lottery Result’ to see results of lottery draws. The application was last updated on August 2015. The application is also deliberately misleading as in the features section it claims to have a feature to publish live lottery results from ‘The Bhutan Lottery Department.’ However, below in the disclaimer section it says it does not have any ‘direct connection’ with the Bhutan Lottery Department.

Mistakes from 2011 onwards

The original Bhutan Lottery business was closed down by the former government on 23rd August 2011 after a series of investigative stories done by this writer exposed billions worth of corrupt and illegal acts in the conduct of the original Bhutan Lottery. Most importantly as a result of such fraud in the legal Bhutan Lottery, Bhutan was losing out billions of INR per year in potential revenue.

A Royal Audit Authority (RAA) report done to verify the writer’s information also lead to a comprehensive RAA report that confirmed all the facts and even found more issues. The former government at the time also said Lottery was an unethical business not conforming to Bhutan’s GNH values.
The rise of such companies was made possible due to the Ministry of Finance and the then Lottery Directorate under it, not doing thorough due diligence in closing the lottery business in August 2011.

The lack of subsequent monitoring or even interest in the issue allowed the fake ‘Bhutan Lottery’ businesses to grow even more in both size and numbers.

Lottery agents in India have to all register with Lottery Departments of their respective state governments. For example the Indian state of Kerala has around 35,000 lottery agents all registered with the Kerala Department of Lotteries.

So while the former government in 2011 terminated its contract with Lottery Don Santiago Martin and closed down the Lottery Directorate, adequate follow up was not done with various state level lottery agencies and authorities in communicating the closure of Bhutan Lottery and ensuring that no other agents could falsely claim to represent Bhutan or print Bhutan Lottery tickets.

The then government in 2011 also declined to conduct an Anti Corruption Commission (ACC) on Bhutan Lottery despite the RAA report recommending several investigations. An ACC investigation would not only have lead to more accountability but it would have exposed the subsequent attempts by Indian agents to replicate ‘Bhutan Lottery’.

The ACC, which does not require government permission to conduct investigations also failed to investigate the issue at the time.

Taking advantage of this communication and monitoring gap the fake companies posing as official RGoB agents set up and expanded their businesses.

Even the current Ministry of Finance which is itself in the process of setting up a State Owned Enterprise (SOE) for Bhutan Lottery was completely unaware about such fake companies exposing a lack of adequate research and awareness on Bhutan Lottery.

Under the original Bhutan Lottery system all draws were all done in Phuntsholing by the former Lottery Directorate and then announced in the respective Indian states as an official announcement. However, the websites of these companies asks visitors to also check with the government gazette for the results. This means that the respective Indian state’s Lottery Department’s are also assuming the fake Bhutan Lotteries represent the Bhutan government. Given the scale of the problem and with past experience, a wider and illegal collusion between some Indian lottery officials and lottery companies to capitalize on the popular Bhutan Lottery brand also cannot be ruled out.

Apart from fraud and financial issues the misrepresentati on of Bhutan by these companies can also carry political implications as millions of Indians buy these tickets assuming that they have the backing and guarantee of the RGoB. Any problems and complications would lead to fingers being pointed to Bhutan.

The real Bhutan Lottery before being closed in 2011 used to enjoy good sales in Indian states like Kerala, Maharashtra, West Bengal and others. It was also sold illegally by the lottery don in Indian states that banned lottery sales like in Tamil Nadu among others. The 2011 RAA report said that in 2007 the actual legal Bhutan Lottery turnover was Nu 263.6 bn. Bhutan was only getting a fractional Nu 210 mn (1000 mn equals 1 bn) of this from the Lottery Don Santiago Martin and so in the process Bhutan was losing out billions in potential revenue.

Impact on restart of original Bhutan Lottery

Meanwhile in Bhutan the government is still in the process of forming the State Owned Enterprise for Bhutan Lottery operations. It will be given a seed fund of Nu 100 mn and is expected to start operations in the first half of 2016. It will start with a limited paper lottery in Bhutan after which it will go online and then gradually expand to India.
The presence of so many fake Bhutan Lottery companies, if not dealt with successfully, will harm the eventual move of the real Bhutan Lottery into India.

Govt to verify and take action

The Finance Minister Lyonpo Namgay Dorji said, “If this is proven beyond a reasonable doubt then it is totally illegal. The Bhutan Lottery will first start in Bhutan only. Therefore, nobody is authorized to start any Bhutan Lottery business outside Bhutan.”
He said, “If this is proven we will take it up at the government to government level and we will also take legal action.”

List of fake ‘Bhutan Lottery’ Companies and their websites

Indian lottery companies posing as RGoB’s ‘Bhutan Lottery’ have been doing billions worth of lottery business since 2011: Full Story (Special…

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