Lottery reform is running out of chances
The reform of the Thai national lottery is seemingly never ending. The workings of the Government Lottery Office (GLO) make little sense to outsiders, epitomised by the fact that while a ticket costs only 40 baht, tickets are only bought in pairs. However, the design of the GLO is rational but has become opaque.
The latest major decision by the GLO was to give discount rates to vendors, including those who receive the lottery quota from the GLO, to help drive prices down. But this has the effect of reducing money available for good causes by four billion baht per year, which seriously undermines one of the philosophical justifications for a lottery — benefiting charities. Even the chairman of the State Audit Commission opposed this decision on the grounds that the real reason ticket prices are high is the existence of the ticket brokers.
Thanks to pioneering investigative journalism by ThaiPublica, we now know who these brokers are and how many tickets they have been receiving, though a new quota may be implemented in September. In fact, three major wholesalers are on the point of being investigated for tax avoidance over the past decade by the Department of Special Investigation and the Anti-Money Laundering Office, with the charge being that their hiking the price constitutes a taxable income. This approach by the military-appointed chairman of the GLO Board may constitute the stick part of a deal, with the carrot being the discount rates. But, why are only three brokers being investigated?
Furthermore, the GLO Foundation, a special purpose-made vehicle supposedly designed to oversee the dispensing of monies to charities, has been receiving 9,213,500 tickets directly, a further 2,129,800 for its Association of Retired GLO Employees, and a remarkable 298,100 tickets for a co-operative store it manages. Charities such as the Government Lottery Vendors Association (Disabled) and Disabled Lottery Vendors Association (Thailand) also benefit, via ticket allocations of 664,700 and 513,400 each.
Moreover, both the military and the police are allocated substantial ticket quotas, the first receiving 2,350,000 and the second receiving 500,000 via the War Veterans Organisation of Thailand and the Police and Families Welfare Foundation, with a further 1,353,900 going to the National Council on Welfare of Thailand. These are all valid beneficiaries, yet without auditing, the public has no access to any information about what happens to these ticket quotas. Where have these tickets been going, if not circuitously to brokers?
In response to inquiries, the GLO stated it had no information about the financial accounts or auditing of the GLO Foundation as they are independent, and the GLO Foundation itself merely repeated publicly available figures regarding salaries. There are valid doubts if they are interrelated in a bureaucratic shield designed to mask the money trail from the GLO to the Foundation. There is thus a question mark regarding the philanthropic status of the GLO Foundation. A Thai philanthropic foundation is legally required to spend not less than 60% of its revenue on charitable acts. Yet, the public does not know how the revenues earned are disbursed. Since its inception in 1939, the GLO has justified its existence by purportedly helping to balance the national budget by levying a tax. However, it is a regressive tax. A study by the College of Local Administration at Khon Kaen University confirmed there was a negative relationship between socio-economic status and the proportion of income spent for government lottery tickets. Thus, the national lottery indirectly contributes to greater wealth inequality in Thailand.
Moreover, Article 5 of the NCPO’s Order number 11/2558 stipulates that the GLO sets up the “Government Lottery Funds for Social Development” for the purposes of preventing and solving the problems of compulsive gambling in Thai society. This is completely disingenuous because, while 99% of the sample surveyed in the Khon Kaen University study parroted the government line that buying lottery tickets is not an act of gambling, no dictionary defines it otherwise. It is a game of chance for money. Yet, it is still so inefficient that more Thais play the underground lottery because it is easier to buy tickets, has better chances of winning, and has variable stakes.
Giving discounted rates to special interests while operating behind a curtain of bureaucracy is questionable, and polls reveal the majority of Thais have no confidence that the present efforts will permanently drive down prices. Simply put, Thailand needs an online lottery with greater odds of winning, user-selected numbers, variable stakes, and electronic points of sale including hand-held devices for lottery ticket vendors. Then the 75% of tickets in the hands of monopolistic distributors can be channelled directly to the people.
The GLO has thrived not because of its functional contribution to society — which is nowhere publicised, even on its own television programmes — but through an opaque system which the military seems as yet incapable of fundamentally reforming.
Peerasit Kamnuansilpa Phd is founder and former dean of the College of Local Administration, Khon Kaen University.