Mani Kumar Subba, Nalini Chidambaram and now Abhishek Manu Singhvi

Congress party spokesman Abhishek Manu Singhvi appeared before the Kerala High Court today (29^th September 2010) for Megha Distributors owned by Santiago Martin against the recent state governments ordinance to amend the Paper Lotteries Act, with provisions including hiking the tax on lotteries. This is a big setback to the Congress in Kerala, which has been vigorously campaigning against the "illegal" Sikkim and Bhutan lotteries, alleging that the CPI-M-led government in the state was helping Megha Distributors.

Inside the court, Singhvi lashed out at the state government for bringing an ordinance that is against the Lotteries (Regulation) rules, 2010 passed by the central government this year and pointed out that it was a clear violation of the constitution by the state government. Singhvi is expected to appear in court again Tomorrow - this time for Bhutan Lotteries.

The Lotteries (Regulation) rules, 2010, issued under subsection (1) of section 11 of the Lotteries (Regulation) Act, 1998 were hurried through after P. Chidambaram became the Union Home Minister. His wife Nalini Chidambaram was the counsel of the lottery agencies in the cases against Kerala government.

LDF government stopped accepting tax advance from promoters of Bhutan and Sikkim lotteries, citing violation of rules, resulting in virtual stoppage of sales of other state lottery tickets. The state government had also brought in an ordinance amending the Kerala Tax on Paper Lottery Act, making the tax provisions more stringent.

The Governments ruled in Kerala had failed to control other state lotteries for the last 12 years because of the unholy nexus between central congress leaders and lottery mafia.

Mani Kumar Subba, the ex-Congress MP from Tezpur, Assam

His family owns MS Associates, a major player in the lottery business, which came under the scanner after the Comptroller and Auditor General detected a massive scam in the conduct of the Nagaland State Lottery in 1999.

The CAG report dealt exclusively with the running of the Nagaland State Lottery, of which MS Associates had been appointed the 'state sole distributor' in 1994.
Apparently, the state government earned only minuscule revenue from the lottery, which ran for four years and had a turnover of thousands of crores of rupees.
While 91 percent of the face value of tickets was to be paid as prize money, only 78 percent was actually given away. The winners were thus cheated of Rs 5,000 crore or Rs 50 billion.
'In the absence of any evidence to the contrary, it can be assumed that this amount was not paid as prize money and was retained by the distributor,' the CAG report said.
The audit began in 1997, a marathon exercise that scrutinised the running of the Nagaland State Lottery from 1993 through 1997. In these years, 83,254 lottery draws were conducted, of which the CAG examined 42,459.
The CAG has calculated that of the Rs 38,297 crore (Rs 382.97 billion) worth of tickets printed, even a mere 2 percent profit for the distributor, agents, and state government would work out to Rs 766 crore or Rs 7.6 billion.
Even if the state government were to get half the profit, it should have been entitled to Rs 383 crore or Rs 3.83 billion. But it received only Rs 40.2 crore or Rs 400.2 million.