Regime lotto price cut failure hits low-income earners
- Published: 22/11/2014 at 12:14 AM
- Writer: Peerasit Kamnuansilpa
Veera Prateepchaikul’s excellent opinion piece on the failure of lottery reform on Nov 3, caused me to reflect on the recent work done at the College of Local Administration (Cola) at Khon Kaen University on the subject of lottery reform.
The problem of overpriced lottery tickets has existed in Thailand for more than four decades now. It is estimated, from a survey conducted recently by Cola, that there are more than 17 million people aged 18 years and above who regularly play the Thai government’s lottery.
They are the ardent supporters of the products of the Government Lottery Office (GLO), which functions mainly as a money source for the nation’s coffers, sucking money from the people whose incomes are low but whose hopes are high at the prospect of having a better life.
Arguably, the lottery tickets that the government is selling are a disguised regressive tax — a tax that takes a larger percentage of money from the lower income earners than from the higher. This means that the problem of overpriced lottery tickets hits those in the low-income brackets harder.
Although the numbers of people affected by the unfair pricing of lottery tickets is staggeringly high, those people do not have any real political power. Nor does the problem carry much political meaning. The National Council for Peace and Order (NCPO) promised to tackle the problem of overpriced lottery tickets. To date this long existing problem remains unsolved.
It seemed that when the NCPO seized power from the civilian government on May 22, they thought they could tackle all the problems Thailand was plagued with. It was why the NCPO thought they could easily deal with the continuing problem of overpriced lottery tickets. But they soon awakened to the reality that not all problems in Thailand can be solved by decree.
Immediately, they tried to climb out of the hole by saying that it would be OK to sell the tickets at a still overpriced figure of 90 baht each. We can see now that each lottery ticket is still sold by the lottery vendors at 110 or 120 baht, depending on whether they are sold as an individual ticket or as a set of the same number. As a result, the NCPO’s credibility is not only undermined, but their power is being seriously tested.
The NCPO’s initial strong drive to solve the problem provided a legitimate rationale for removing the former director of the GLO and installing the current director with a selection process conducted behind closed doors. After the fanfare of the selection process, everything is now going back to business as usual.
The government lottery tickets that represent a ray of hope for a better life to millions of low-income earners who still selling like hot cakes at unfair prices. To date, the NCPO has not taken a clear policy stance on this problem.
Based on information obtained, all the major government lottery operators cooperate and form themselves like a de facto syndicate to buy the lottery tickets from the small operators at attractive prices. This allows them to control the supply of lottery tickets and in effect monopolise the market sales of lottery tickets in the country. A calculation just of the difference between the face value and the actual ticket price, minus the amount earned by the vendor, yields a profit of approximately 13 billion baht per annum for these operators. In fact, the amount of their financial gain could be higher than this as they buy the tickets in their own quota from the GLO at a 9% discount to the face value.
Naturally, these large profits by manipulation bestow the economic power that eventually awards the political power to the so-called syndicate. Once both economic and political power are in the hands of this syndicate, it is not easy at all for the administrator of a public organisation like the GLO to transform the system that has been operating for decades for the benefit of the power structure. If the NCPO wants to dissociate themselves from this protracted and seemingly unresolvable problem, they have to show strong political will.
First, they must make a formal public announcement that they do have a policy to control the price of the lottery tickets.
Second, they must restructure the governing board of the GLO to allow for the consumers of lottery products to serve as board members through a transparent selection process. The new governing body should decide whether new lottery products that are not easy to manipulate and are subject to supply controls should be created to replace an old-fashioned and ill-designed product like the current lottery tickets.
Third, in the selection of the director of the Government Lottery, a strong and effective public affairs management figure must be chosen to usher the GLO to better serve the benefit of the poor, whose hope for a better life has guided them to become loyal customers of the GLO.
In order for all of these to happen, the NCPO must first realise that overpriced government lottery tickets make life more difficult for the majority of Thai population who have low incomes. This will allow the players to play the lottery games with a better hope for a better life.
Peerasit Kamnuansilpa, PhD, is founder and former dean of the College of Local Administration (Cola) at Khon Kaen University.
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