Scams and irregularities are not uncommon in lottery business which, as one official put it “always has the element of involvement of wheels within the wheel” . In almost all cases, the state government has been the loser and that itself raises questions about the transparency and accountability in lottery business.
Award of contract for organising Nagaland State lottery draws has taken the legal route that led to suspension of draws from September 1 to 30,2009 thereby resulting in huge revenue loss estimated at Rs.13 crore to the state.
The genesis of the current impasse started in 2003 when the state government, after opening bids appointed M/s Future Gaming & Hotel Services Private Ltd (also formerly known as M/s Martin Lottery Agencies and M/s Future Gaming Solutions India Pvt.Ltd) as distributors for paper lotteries on March 11,2004 for a period of five years.
The agreement was then extended for another period of five years from March 11,2009 to September 31, 2012 “without calling for fresh tender”.
It was learnt, that the reason given for extension without fresh tender was “ to safeguard the revenue of the government” and the terms in the extension contract reportedly remain valid till finalisation.
In bidding and finalisation processes, lottery firms often took the government to court acting on behalf of either of the main bidders as means to create hurdles.
On June 27,2012 the State lotteries department appointed M/s Gaming India Distributors Limited,Chennai and M/s Future Gaming Solution India Private Ltd., as distributors for a period of five years w.e.f. August 2012 where each firm was permitted to operate an equally apportioned number of weekly draws per day – 12 for paper or online or both.
As per rate approved, each firm was supposed to pay to the government an amount of Rs.35,000 for normal lottery and Rs,75,000 for bumper lottery.
M/s Future Gaming however took the matter to court challenging the appointment and setting aside the tender process. The Court directed the state government to call for fresh tender in order to get more revenue .
While the matter was kept in abeyance, during the period, M/s Future Gaming managed to obtain an ad-hoc agreement with the state lotteries department for a period of six months for all 24 lottery draws at the rate of Rs.15,000 per draw. Interestingly, M/s Future Gaming had previously accepted the highest rate quoted by Gaming India Distributor Ltd. for Rs.35,000 per draw. The ad-hoc agreement resulted in huge loss to the state exchequer.
The state lotteries department, then framed new conditions in the NIT which could not be met by other bidders except M/s Future Gaming Solutions India Pvt.Ltd. relating to turnover of Rs.3000 crore for the last three years. One of the bidders M/s Gaming India Distributors Ltd. claimed that the new and stringent clause was inserted only to eject it from the process while also claiming that it has enough resources through businesses in various ventures across India.
M/s Gaming India Distributors Ltd. had filed a petition in the court challenging the terms and conditions in the NIT for which the high court ordered a stay. It was learnt that an unusual delay had led to suspension as the judgement order passed on December 12,2012 was received by the state lotteries department only on September 4,2013.
Final hearing was partially heard on November 24,2014 to be continued after court vacation for which the lotteries department await the next hearing.
It may also be recalled that Congress Legislature Party (CLP) leader Tokheho Yepthomi during the July 2014 assembly session had revealed of another scam that surfaced in the department.
During the July session, Tokheho stunned the house when he revealed that the state government had filed a petition in the high court against M/s CAIRS for recovery of a balance of Rs.77 crore owed to the state government.
The MoU with M/s CAIRS on the rate fixed as royalty was approved by the cabinet but quite mysteriously, the rate underwent a lower revision through an addendum signed by some senior bureaucrat(s) without processing it and obtaining further approval of the cabinet. Most surprising also, the file that was supposed to contain the “addendum” to the MoU was not traceable in the state lottery department.
Friday, February 20, 2026