Rising Gold Price Boosts Lottery’ Appeal
In the week when gold prices were reaching record highs, the Win-Win lottery in the state of Kerala, India reported that it had sold its entire allocation of tickets for that week’ draw. The reason for the sudden boost in sales is that as part of its first prize the lottery offers 50 sovereigns (395 grams) of gold.
Investors around the world have been piling into gold in recent weeks as they seek a safe harbour for their funds as uncertainty continues to swirl around international stock markets. The result has been a surging gold price in August, hitting almost US$1,900 an ounce late in the month. All this has been excellent news for sales of Kerala’ weekly Win-Win lottery.
Lottery players in Kerala have clearly been attracted to the rising value of the golden prize, which is made even more attractive by the fact that a lucky winner will not pay income tax on the gold. The state lottery covers Rs 6,000 in income tax for each sovereign won by lottery players.
The lottery has proposed that the cash component of the Win-Win top prize be reduced for upcoming draws to compensate for the rising value of the gold. The gold portion of the prize will remain at 50 sovereigns. There are plans to introduce more games to take advantage of the new interest in the lottery, although none will have gold on offer as a prize.
Global Betting and Gaming Consultants’ (GBGC) Head of Research Lorien Pilling commented, “Kerala’ lottery players have clearly been attracted to the gold prize on offer as its price has surged in recent weeks. Global lottery sales have performed well in recent years but state lotteries are always looking to boost revenues. Maybe other lotteries should consider offering quantities of gold as a prize rather than the usual cash sums to stimulate interest.”
In its Global Gambling Report Betting On Regulation (April 2011), GBGC calculates that the global lottery market was worth US$ 115.9 billion in gross gaming yield (GGY) in 2010 and will rise by 5.3% in 2011 to US$ 122.1 billion. Despite the recession players have continued to play their local lottery and revenues grew by 2.5% even in the difficult year of 2009 when other gambling sectors had falling revenues. Innovative games with large jackpots help galvanise sales e.g Euromillions in Europe, Powerball in the US. But in India the prize is gold!