PhIT’S not just Central agencies but at least three MPs, including two from the BJP, had alerted the government that “Lottery King” Santiago Martin’s Future Gaming and Hotel Services Pvt Ltd was allegedly indulging in “malpractices” leading to money laundering and tax evasion.
One of these alerts was sent on December 20, 2023, just three months before the release of electoral bond data showed purchases by Future Gaming worth over Rs 1,300 crore between 2019 and 2024, The Indian Express has learned.
The December alert, in the form of a letter to Union Finance Minister Nirmala Sitharaman, was sent by Sujay Patil, the BJP MP from Ahmednagar in Maharashtra. The other alerts were sent earlier by two more MPs from the state: BJP’s Unmesh Patil (Jalgaon), who later switched to Shiv Sena (Uddhav Thackeray), and Congress’s Suresh Narayan Dhanorkar (Chandrapur), who died in May 2023.
In their letters, the three MPs flagged alleged malpractices in the lottery systems of northeastern states, particularly Nagaland where Future Gaming is the sole distributor of its paper lotteries to several other states, including Maharashtra, West Bengal, Punjab and Mizoram. The Maharashtra MPs also urged the Government to notify new rules that aim to bring tighter norms for lottery distributors but have been on the back burner since 2019.
In his letter dated December 20, 2023, BJP’s Sujay Patil wrote that there has been an increase in malpractices in the paper lottery business, which has allegedly led to money laundering and tax evasion. He attributed this mainly to the alleged “misuse of limitations by the distributors of northeastern states” and claimed that “officials in the lottery departments of these states are like puppets in the hands of distributors”.
In the letter, Sujay Patil also alleged that Nagaland earns a revenue of only Rs 30 crore in a year from lotteries even though the daily turnover from lottery sale by its distributor is Rs 70 crore every day.
Jalgaon MP Unmesh Patil wrote three letters — two to the Union Finance Minister and one to Union Home Minister Amit Shah — in February and March last year and in at least two of them raised issues with Nagaland State Lotteries and its distributor. “The state of Nagaland… may be under the influence of their distributor has stopped writing name of the tickets where tickets are meant to be sold resulted (sic) in huge illegal sale of lottery tickets and huge evasion of GST,” he wrote in his letter dated February 22, 2023, to Sitharaman.
Unmesh Patil’s letter to Shah in February last year prompted Nagaland Chief Minister Neiphiu Rio to state that even though the method of organizing lotteries is the same in each state, Patil has “singled out northeastern states accusing them of abdicating their responsibilities to the distributors”.
BJP MP Sujay Patil was not available for comment. When contacted, Unmesh Patil said, “As an MP, I have been following this issue for some time. I believe there was some action based on my letter, but the government has never satisfactorily given me a response on the concerns I erased. The Government should notify the lottery rules so that malpractices can be prevented.”
Santiago Martin of Future Gaming did not respond to queries from The Indian Express. The Ministry of Finance did not respond to queries on follow-up action, if any, taken on the letters sent by the MPs. The Ministry of Home Affairs did not respond to queries from The Indian Express.
When contacted, Nagaland State Lotteries director Olemjungla Aier said that since the allegations against Future Gaming are “under investigation before the appropriate authorities, we refrain ourselves from providing any comments on the same…”
“Nagaland State Lotteries is organizing and conducting its lotteries in strict compliance of the Lotteries (Regulation) Act 1998, the Lotteries (Regulation) Rules 2010, the directions issued by the Ministry of Home Affairs from time to time, the Nagaland Lotteries (Regulation) Rules 2022 and the rules framed by the respective states in which the Nagaland State Lotteries are being marketed and sold,” the official said.
Since 2015, Future Gaming has been under the scanner of Central investigating agencies. It has been flagged by the Ministry of Home Affairs, the Comptroller and Auditor General (CAG) and several central agencies as a company allegedly engaging in fraudulent lottery business.
In early 2019, the Enforcement Directorate began a money laundering probe against Future Gaming. By July that year, it had attached assets worth over Rs 250 crore linked to the company. On April 2, 2022, the ED attached movable assets worth Rs 409.92 crore in the case. Five days later, records show, Future Gaming bought Rs 100 crore in electoral bonds.
In March this year, The Indian Express reported that the Union Home Ministry had written to eight lottery-running states in September 2023 about the alleged “frauds” and “irregularities” linked to Martin’s companies. The letter noted that it had received complaints with “serious allegations” against Martin and his lottery firms.
Future Gaming bought electoral bonds worth Rs 1,368 crore between April 12, 2019 and January 24, 2024. Trinamool Congress was the biggest beneficiary of Future Gaming’s bond purchases with Rs 542 crore in its kitty, followed by DMK (Rs 503 crore), YSR Congress (Rs 154 crore) and BJP (Rs 100 crore).
Of Rs 12,769 crore worth of electoral bonds encashed by political parties in the last five years, the ruling BJP got almost half (Rs 6,060.52 crore in total), and one-third of this came during the 2019 Lok Sabha elections. TMC was the second highest beneficiary of the scheme as it redeemed Rs 1609 crore, followed by Congress which received a total of Rs 1,421.87 crore.