By Peerasit Kamnuansilpa
Special to The Nation
One of the earliest high-profile junta actions was to reform the government lottery system. However, after five years of military rule, gamblers have switched back to the underground lottery, showing much more must be done to make the government lottery efficient and equitable.
In 2014, when the National Council for Peace and Order (NCPO) came to power, it promised to tackle the problem of overpriced government lottery tickets. Yet after initial fanfare surrounding the re-organisation of lottery ticket distribution, little has been achieved to control the prices of the government-run lottery or to curtail abuses of its underground counterpart. Limited intervention by the NCPO has produced few results from the perspective of lottery ticket buyers.
It is common to see a set of 15 lottery tickets with the same “lucky” number sold in booklets at prices of Bt2,500 to Bt3,000, a set of 10 at Bt1,200 to Bt1,500, and a set of two to five tickets at Bt100 per ticket. Few single lottery tickets are available at the face value of Bt80. One reason why single tickets are hard to find is that syndicates are still controlling distribution, which makes it difficult for small vendors, most of whom are from rural areas, to secure a small number of tickets. Instead of selling directly to individual customers, most of those who succeed in the fierce competition for a bulk number of tickets, 1,000 or so, prefer to sell theirs at a marginal profit to business syndicates.
The syndicates bundle the tickets into sets with the same numbers and sell them to the vendors, who then offer them directly to consumers at exorbitant prices. The real winners of the government lottery are thus those involved in printing and marketing. The losers are the customers.
To investigate the reality, in November 2018 Khon Kaen University conducted a survey in rural Kalasin. The study found a lower demand for government lottery tickets than for the underground lottery.
Underground lottery winning
One explanation is that most rural residents are from socio-economically depressed groups who cannot afford to enter the government lottery, which can cost as much as 38 per cent of their monthly income for the two monthly draws. More tickets can be bought for the same sum on the underground lottery.
The other explanation is that the marketing strategies of the underground lottery are part of daily village life. The sellers are almost always fellow villagers who reach out to potential buyers. Compared to the government lottery, participating in the underground lottery is effortless. Moreover, the buyers can select their favourite numbers, which is not always possible with the government lottery. Also, underground tickets can be sold on a “buy now, pay later” basis, provided the payment is made before the next draw.
‘Tax’ on the poor
The majority of surveyed villagers were poor. These rural citizens stated that their economic conditions are worse than before the coup. Amid these economic hardships, the lottery provides a ray of hope that they could win cash to help support their families. Those hopes have grown in tandem with the current economic downturn, meaning they now buy more underground lottery tickets than ever. The Bt500 cash handout to low-income earners under the government welfare programme often simply provides additional cash for playing the underground lottery. In the eyes of the underground lottery operators, the villagers’ creditworthiness has simply been improved by the welfare programme. They see it as a guarantee that customers will have sufficient money to pay their gambling debts before the next draw.
Asked about their problems in the playing the underground lottery, the villagers complained operators often halve the pay-out rate when many people have the same winning number. To prevent such abuses, they would like the government to revive two- and three-digit lotteries, similar to those operated under Thaksin Shinawatra’s administration. Respondents also said that proceeds from the government lottery should go to community improvement programmes, education scholarships for rural children, and the wellbeing of the poor.
These policy recommendations have both economic and political implications. An estimated 65 per cent of rural adults regularly play the underground lottery. On average, respondents spent Bt1,300, or 12.5 per cent of their income on the underground lottery’s two monthly draws. This is twice as much as the amount currently spent on the government lottery. Estimated nationwide spending on the underground lottery is nearly Bt166 billion per year, equivalent to 1.2 per cent of Thailand’s GDP in 2017. While not all of that money can be channelled to GDP growth, it seems obvious that creating an accessible, affordable and transparent government-run lottery would stimulate economic growth.
From the political perspective, the approximately 20 million people who participate in the underground lottery is almost three times higher than the number of farmers nationally, indicating its popularity. Reforming the government lottery so that it truly replaces the underground lottery, while returning the proceeds to the poor and the needy, will help any political party win votes and would also lead to more fairness for all.