Essel betting big on online lottery project

Sibabrata Das in Mumbai

Essel Group will invest Rs 300 crore through a wholly-owned subsidiary, Playwin Infravest, in an online lottery project.

“The investment will be made over a six-month time frame. It will be a mixture of promoters’ capital and debt,” said RK Singh, chief executive officer, corporate, Zee Telefilms, who has been moved to head the project. Mr Singh, however, did not reveal the debt component of the investment.

The company will have to pay a minimum guarantee of Rs 1,000 crore to the Karnataka government over a period of seven years, it is reliably learnt. The assurance to the Sikkim government is Rs 700 crore over seven years.

“The agreement on this, however, has not yet been finalised,” the source added.

Essel’s subsidiary has won the licences for the lotteries of Karnataka and Sikkim states, as reported in The Financial Express. The state governments will be given 20 per cent of the total revenues, Mr Singh said.

Playwin Infravest will be the agent to run the Sikkim government’s online lottery for seven years, which can be further extended for a similar period. The company has also applied for licences to the Maharashtra and Punjab state governments. Maharashtra is looking for an online agent for 10 years, which can be further extended by another 10 years.

The weekly draw will have a Rs 4 crore jackpot. There will be other winners and the total prize money will be 47 per cent for every rupee collected, said Mr Singh.

Participants can either get pay slips from the outlets or go in for a random computerised selection of numbers by a terminal at a retail
outlet.

The company is setting up 5,000 retail outlets in 200 cities and towns, spread across 14 states. This includes the four metros but excludes Delhi where the state government has not approved a state lottery practice. Each outlet will involve an investment of Rs 5 lakh, Mr Singh said.

Live draws of the results will be shown on the Zee network channels, involving celebrities to boost such programmes. “In UK and the US, such programmes draw huge ratings. Television networks compete to acquire such programmes,” said Mr Singh.