The Kerala government is under pressure after the Centre decided to place its state-run lottery under the 40% GST slab. The change, which comes into effect from September 22, has left the state little time to find an alternative.
Officials reportedly say the government is not planning to raise ticket prices, fearing it would push away buyers. That leaves two unpalatable options — either cut the commission of agents or reduce prize money.
The lottery sector in Kerala is not a small corner business. Around two lakh people depend on it, including thousands of street sellers, many of them physically challenged. For them, even a small cut in commission could make survival harder.
Unlike gambling casinos in Goa, the state positions its lottery as a welfare scheme. A large share of the funds supports public health programmes. For example, the Karunya lottery channelled revenue into more than two lakh dialysis sessions, 80,000 chemotherapy treatments and 16,000 angioplasty surgeries between 2020 and 2025.
Revenue has been climbing year after year: ₹11,892.88 crore in 2022-23, ₹12,530.91 crore in 2023-24 and ₹13,244.48 crore in 2024-25. But finance minister K N Balagopal stressed that the state’s actual profit is slim, only 3 to 5% of total revenue, as most of the money goes into prizes, commissions and advertisements.
Kerala argued that the lottery should not be treated like other gambling activities and asked for time and flexibility. But the Centre rejected the request, sticking to its ‘sin goods’ classification.
Balagopal said the government will urgently meet with agents and other stakeholders before the tax kicks in. Whether the state can find a quick fix without hurting either revenue or livelihoods remains unclear.
