Regulating the lure of lottery and the Thai love of gambling
A large number of people in Thailand’s middle-class and lower-income groups have been trapped in a dream of becoming rich overnight by winning a big lottery prize.
The Government Lottery Office (GLO) holds its draw twice a month — on the 1st and the 16th — and issues 100 million tickets for each round.
For many people, the two days when the lucky numbers to be drawn are special and full of hope. Such is the importance of the event that it is even aired live by state TV and by many social media platforms.
At the end of the event, people go on social media and post stories about their lucky or unlucky outcomes. Then, within a day, news will break out on who won the first prize, which offers 6 million baht to the winning ticket. Many local media outlets have been accused of sensationalism in their coverage of lottery-related stories.
Gullibility to gamble
Statistics show that Thais love gambling — 59.6 percent of the population aged 15 years and above up, or 32.33 million people — are engaged in gambling activities, such as casino, football games, government lottery and underground lottery, according to a survey in 2021.
The number of people buying government lottery tickets was estimated to be 24.63 million in 2021, representing 45.4 percent of the country’s population, according to the 2021 survey conducted by the Center for Gambling Studies (CGS) at Chulalongkorn University. It was up by 8.3 percent from a survey in 2019.
The money circulating in government lottery gambling was estimated at 139.98 billion baht in 2021.
The most alarming statistic is that there is a 27.5 percent increase in gamblers aged 15 to 18 years old and a 14.6 percent rise among those aged 19-25 years old, compared to the previous survey in 2019.
The survey revealed that 19.28 million people, representing 35.5 percent of the population, had bought underground lottery tickets in 2021, up 8.7 percent from the 2019 survey, while money in circulation was estimated at 149.92 billion baht.
The number of children aged 15-18 years, who were engaged in lottery, increased by 22.8 percent, and youth aged 19-25 years rose 12.9 percent, while the working age group aged 26-59 years, banking on lottery, was up 24 percent.
“It is worrisome that the number of children and youths gambling on lottery tickets has increased,” said Nualnoi Treerat, director of the CGS. The survey estimated that there were 702,400 buyers of the government lottery aged below 20 years, even though the sale of lottery tickets to that age group is prohibited.
Another concern is that “a majority of Thais — 52.6 percent — do not think that betting on government lottery is gambling,” Nualnoi said.
They buy not only the government lottery but also illegal lottery both in Thailand and in neighboring countries, such as Laos and Vietnam. The services of online lottery platforms make it much easier to access underground lottery domestically and abroad.
Government asked to enforce ban on lottery sales to under 20s
One of the big issues facing the government lottery is that retailers charge customers more than the 80-baht face value, usually pricing them at 100 or 120 baht per ticket, well above the price set by the GLO. The government has been trying for many years to solve the problem of overpriced tickets, but has failed so far.
The latest tactic is for the GLO to sell lottery tickets online, but in limited numbers — about 17 million tickets currently — with each ticket priced at 80 baht. Private companies operating as retailers, however, are selling overpriced lottery tickets online, citing operation costs, as they provide services to customers.
Many believe that should GLO sell all tickets online, the price could be capped at 80 baht each. But retailers oppose such a proposal and the government also worries about its impact on large numbers of retailers who depend on lottery ticket sales for their income.
The GLO launched digital tickets in June last year, selling them via the state-owned Krungthai Bank’s Paotang application. The GLO targets sale of 30 million digital tickets in each round of lottery drawing this year with 17 million tickets for February. By the end of the year, digital tickets could reach 50 million, or half of the total tickets. The government expects that then it would check the issue of overpricing.
Online platforms controversy
The authorities are currently cracking down on private companies that resell government lottery tickets online. They were very popular recently as they invested large amounts of money on advertising. But the authorities have shut down some online platforms, accusing them of selling overpriced tickets, violating the direct sale law, and money laundering in some cases.
The Finance Ministry also plans to seek the Cabinet’s permission to sell two-and three-digit lottery tickets this year to compete with underground lottery.
Direct and indirect advertising
Earlier, private retailers spent money on advertising government lottery, wooing customers to buy them from their online platforms.
Nualnoi suggested that advertising should be limited as in many other countries, aiming to reduce gambling activities. The mass media should also be subjected to some restrictive rules on lottery coverage, as the local press regularly reports superstitious stories, such as a big tree giving people the lucky number to win big prizes. Or news hosts often showing viewers the vehicle plate of the prime minister or cars involved in serious accidents, indicating that those digit numbers could be the secret to winning the lottery.
Only recently, the National Broadcasting and Telecommunications Commission (NBTC) took action to regulate lottery advertising on television. It announced on January 25 its decision to ban the advertising of lottery and online lottery.
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GLO reform needed
The GLO, which is a state-owned enterprise, currently acts as the operator and regulator, resulting in conflict of interest. Nualnoi proposes the separation of the operator and regulator. The GLO monopolizes lottery activity in the country, while the previous government wanted to limit lottery business considered to be harmful.
There have been questions on transparency in its management, as it is thought to be a financial source for influential figures whether they are high-ranking military, police, state officials or politicians.
Yet, the GLO is among the few state-owned enterprises that annually send large transfers to the state coffers. In 2022 and 2021, it transferred a sum of 53.74 billion baht and 51.12 billion baht respectively to the state coffers compared with 14.64 billion baht 10 years ago.
A tax in disguise
A large number of people are still misled by their own faith or belief in supernatural powers to help someone win a big lottery, blinding themselves into believing in the likelihood of a lucky roll of the dice.
Some economists label the government lottery as a tax in disguise because it is almost certain that the buyers would lose money to the GLO.
Some have suggested a simple guide to construct a tool for investment in lottery tickets.
Suppose a lottery ticket is worth 100 baht, there is only one in a million chance to win the first prize of 6 million baht, so the formula is 1/1,000,000 x 6,000,000, resulting in an expected value of 6 baht. On the flip side, there is a 999,999 in a million chance you will lose 100 baht, or 999,999/1,000,000 x 100, resulting in an expected value of -99.99 baht. The final outcome by adding expected gain and loss together would turn out to be negative returns.
So, on a 100 baht investment, you will almost certainly lose 94 baht. That is not worth the gamble.
Economists have labelled the government lottery as a tax in disguise on the poor. They suggest that the money be redistributed among low-income groups via social welfare schemes.
By Thai PBS World’s Business Desk