THIRUVANANTHAPURAM: The state government has found itself in a fix as the Centre has included its state-run lottery under the 40% GST tax slab. The move will force the government to either reduce the commission paid to agents or lower the prize money.
Sources confirmed the government is not planning to increase the ticket price as that would impact the sector. Unlike the gambling casinos in Goa, the Kerala lottery provides livelihood and welfare to around two lakh people, but it has fallen under the Centre’s ‘sin goods’ category. With the new tax regime set to come into effect from September 22, the state is running out of time to find a quick-fix solution.
While lotteries have been a major revenue-generation source for the government, hundreds of people, especially the physically challenged, rely on selling these tickets for livelihood. The state government feels lottery should not be treated like other gambling activities.
For instance, funds generated from Karunya lottery is used for the treatment of underprivileged citizens. From 2020 to 2025, these funds supported over two lakh dialysis sessions, over 80,000 chemotherapy treatments, and over 16,000 angioplasty surgeries. Revenue figures from the Directorate of Kerala State Lotteries show a steady rise over the past three financial years: Rs 11,892.88 crore in 2022-23, Rs 12,530.91 crore in 2023-24, and Rs 13,244.48 crore in 2024-25.
Now, many — from major lottery dealers to street-level sellers operating at bus and railway stations — are deeply worried about the impact of the tax reform. Jacob Thomas, a lottery agent in Thiruvananthapuram, said, “My commission on a Rs 50-ticket is around Rs 7, but with shop rent, staff salaries, and electricity, overall income is low.
Cutting commissions will force us to reduce shops and staff.” For individuals like Asha, a seller in Ernakulam, the lottery business has been a lifesaver.
“I sell around 50 tickets daily, roaming bus stands and railway stations. This small business helps me support my family as a cancer survivor,” she said.
The Onam bumper lottery, which offers a grand prize of Rs 25 crore and costs Rs 500 per ticket, provides a commission of Rs 90 per ticket. Physically challenged seller Appu S shared his struggle: “To sell two or three tickets, I walk four or five kilometres, pleading with people. It’s tough, but it helps me survive without much investment.”
However, the industry has a darker side too. Rajesh George, an autorickshaw driver from Kottayam, admitted, “I spent 20 to 30% of my earnings buying lottery tickets, ruining my family and ending in divorce. I’m now struggling with debt.” While the state lottery revenue figures show a steady growth, Finance Minister K N Balagopal clarified that most of the revenue goes to prizes, agent commissions, and advertisements.
“The government’s actual profit is just 3 to 5% of the revenue,” the minister said.
Balagopal added the state objected strongly to the 40% GST slab but the Centre rejected all requests for time and flexibility. “We now have to urgently meet with lottery agents and stakeholders to find a solution before the tax takes effect,” he said.
Senior officials admitted that the Centre placed the Kerala lottery under the ‘sin goods’ category without considering its unique role in welfare and livelihood creation. With the deadline fast approaching, Kerala faces a tough challenge in preserving the livelihood of around two lakh people dependent on the sector.
Kerala lottery at crossroads
Supports roughly 2 lakh people including agents, street sellers, and the physically challenged
Funds public welfare programmes, unlike profit-driven gambling
Government profit from total revenue is just 3 to 5%
The Centre refused requests for time or other options for the state to come up with a solution to save the lottery