Bhutan’s former Lottery Agent Santiago Martin

Bhutan’s former Lottery Agent is highest contributor to Indian Political parties

Several illegal online lotteries still operational in Bhutan’s name in India

In a surprise revelation, it has been found that the largest donor to Indian political parties is Bhutan’s former Lottery Agent Santiago Martin.

Martin’s company Future Gaming and Hotel Services purchased Rupees (Rs) 13.68 billion (bn) of Electoral Bonds between 12 April 2019 and 24 January 2024. These bonds belong to political parties that get the money.

Martin is the only Indian business house to cross the Rs 10 bn mark in buying electoral bonds showing how lucrative the lottery business is as he even exceeded major  business houses in India.

The largest recipient of the bonds is the political party ruling the south Indian state of Tamil Nadu called the DMK who got Rs 5 bn.

The next big recipient was YSR Congress at Rs 1.5 bn which rules the South Indian state of Andhra Pradesh.

He then gave Rs 500 mn to the BJP which heads the central government in Delhi, Rs 470 mn to the Trinamool Congress Party that heads West Bengal.

This still does not account to which parties he gave the remaining Rs 6.6 bn in party donations.

The above details came to light after the Supreme Court of India asked the State Bank of India to disclose the details of the electoral bonds to the Election Commission of India after a court case was filed on the issue.

Martin was Bhutan’s Lottery agent in India between November 2007 and August 2011 after the first elected government terminated the lottery business in response to a series of investigative stories by the writer on various illegalities in the lottery business while working as the News Editor of Business Bhutan.

The writer had recommended cleaning up the lottery business so that Bhutan could earn billions more, but the first government shut it down instead.

Illegal online Bhutan Lotteries

A matter of concern now is that though Bhutan terminated Martin as the Lottery agent and shut down the lottery business in India, there are still many online websites claiming to be Bhutan lottery doing billions in business and having up to 5 lottery draws a day.

Coincidentally, the results of these ‘Bhutan lotteries’ are also being shown on certain websites which also give the results of the lotteries of states like Sikkim, Nagaland, Assam (Bodoland), Manipur, Meghalaya, West Bengal and Punjab where Martin has a presence or is the main distributor.

In January 2016, this paper did an investigative story exposing 17 online lottery sites which all claimed to be legitimate Bhutan Lotteries and was doing billions worth of business.

Interestingly, most of these sites started from 2011 onwards after the first elected government closed down the Bhutan Lottery business.

When the now defunct lottery agreement was revised with Martin in 2010 March, Bhutan had allowed Martin to market the Bhutan lotteries online. It should have come to a stop when Bhutan shut down the business in August 2011.

Of the 17 sites investigated by the paper in 2016 only four sites are still functional of which only two called and is still doing draws.

One company claiming to be the ‘Government of Bhutan Lottery’ gave away  Rs 163 mn as lottery prize money in just four draws in 20 days between 1st January 2016 and 20th January 2016. If this is averaged out over a year it comes to more than Rs 2 bn in just prize money.

In a possible reaction to the 2016 story by this paper, the owner of these sites has shut down most of them but they have now moved to different sites.

This paper found that there are 18 new ‘Bhutan Lottery’ websites (see box) that mostly do draws and give results with some giving only the results.

These claim to be Government of Bhutan authorised Bhutan Lotteries and claim to be issued by the Director of Bhutan State Lotteries which are false. Some have even manipulated the RGoB seal of the government on the sites.

It cannot be ruled out that these online Bhutan Lottery sites are being run by Martin given that these fake Bhutan Lotteries results appear in sites where Martin run lotteries results appear.

The Bhutan Lotteries had the strongest brand value before as people trusted it and it was enormously popular in many Indian states.

Mistakes by Bhutan

The rise of such companies was made possible due to the Ministry of Finance and the then Lottery Directorate under it, not doing thorough due diligence in closing the lottery business in August 2011.

The lack of subsequent monitoring or even interest in the issue allowed the fake ‘Bhutan Lottery’ businesses to grow even more in both size and numbers.

Lottery agents in India have to all register with Lottery Departments of their respective state governments.

Adequate follow up was not done with various state level lottery agencies and authorities in communicating the closure of Bhutan Lottery and ensuring that no other agents could falsely claim to represent Bhutan or print Bhutan Lottery tickets.

Taking advantage of this communication and monitoring gap the fake online sites posing as official RGoB agents set up and expanded their businesses.

Why Martin gave Rs 5 bn to DMK in Tamil Nadu

Journalists in India are wondering why Martin gave Rs 5 bn to DMK which runs Tamil Nadu.

Back in September 2010 when this writer first started investigating the illegalities around Bhutan Lottery it was found that even though Tamil Nadu had banned any lotteries since 2003, Bhutan Lotteries were being illegally printed and sold there. Tamil Nadu is the largest South Indian state with the biggest economy and a craze for lottery tickets even after it got banned in 2003. For example, 118 people were arrested and 60 cases were filed in Tamil Nadu in 2007 for distributing Bhutan lotteries illegally.

A friendly state government in Tamil Nadu would benefit any lottery agent selling illegal lottery tickets there.

Huge Opportunity for Bhutan

The second elected government in Bhutan from 2013-2018 had promised to restart the Bhutan Lottery operations in India, but it could only succeed in starting the paper based Bhutan Lottery domestically which continues to this day.

There is still a huge opportunity for Bhutan to restart its lottery business in India and earn billions at a time when the country’s economy is not doing well.

This is more so because of all of India’s neighbours Bhutan is the only one allowed to legally sell lotteries in India under the ‘Agreement on Trade, Commerce and Transit between Bhutan and India’ where the protocol to the agreement allows Bhutan to sell lottery tickets in India.

The real Bhutan Lottery before being closed in 2011 used to enjoy good sales in Indian states like Kerala, Maharashtra, West Bengal and others. It was also sold illegally by the lottery agent Martin in Indian states that banned lottery sales like in Tamil Nadu among others.

Martin currently operates lotteries in 13 Indian states where the lottery is still legal like Arunachal Pradesh, Assam, Goa, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Sikkim, and West Bengal. These are all the states where Bhutan Lottery can be sold again legally.

Background of the Lottery scam

This writer in the various investigative stories from 2010 to 2011 found Billions worth of Bhutan lottery tickets printed at non-security presses which means that fake tickets are printed too and prize winners were denied prizes as these security presses have to adjudicate the winner.

Tickets banned by both governments like single and double-digit tickets were found in large quantities.

Bhutan lottery was distributed in many Indian states where lottery is banned which meant huge revenue that is not accounted for and the printing of unauthorized Bhutan Lottery tickets.

Prize money was not being given in full.

There were 544 FIRs in Kerala up to 2011 against Bhutan’s agent for violating lottery and tax laws and later 16 CBI cases.

In West Bengal and Kerala instead of the full prize money only half was being printed with Martin pocketing the other half which came to Rs 28 bn a year. This 28 bn should actually come to Bhutan as the contractual agreement.

Based largely on the stories and documents supplied by this writer the then government asked the RAA to do a special audit.

RAA found unauthorized payments in millions to Bhutan’s Lottery Directorate staff by Martin. It confirmed issues of undeclared prizes, reduction of contract amount of Nu 470 mn to Nu 210 mn per year for Martin by the then government on non-existent grounds, transfer of lottery agreement from Martin to Monica being illegal, printing in illegal presses, Bhutanese employees and their relatives in Bhutan working for Martin won many lottery prizes etc.

RAA found Nu 4.437 bn worth of undeclared prize money in just four months of 2010.

The 2011 RAA report also confirmed this writer’s findings saying that in 2007 the actual legal Bhutan Lottery turnover was Rs 263.6 bn. Bhutan was only getting a fractional Nu 210 mn (1000 mn equals 1 bn) of this from Santiago Martin and so in the process Bhutan was losing out billions in potential revenue.

RCSC rules require executives to be transferred every few years but former Lottery Directorate Director Yeshey Lhendup was kept in Lottery Directorate for 21 years till 2010.

The Bhutan Lottery Directorate was supposed to monitor the illegalities and look out for Bhutan’s interests but it did not do so.

Two Bhutanese officials who had gone to make enquiries about the various illegalities while traveling from Kerala to Tamil Nadu died in a mysterious ‘car accident.’ No enquiries were ever made and the matter was quietly buried.

Despite the first elected government’s initial promise to send corrupt practices to ACC if found in RAA report it was not sent to ACC even on the recommendation of RAA.

Apart from loss of potential revenue for Bhutan is also the impact on Bhutan’s image as a 20 March 2024 article by the BBC on Martin said that his ‘lottery empire stretches across several Indian states as well as the neighbouring country of Bhutan.’

People actually think the illegal online Bhutan lotteries are authorized by Bhutan to Martin.

Martin was the Kingpin of legal and illegal lotteries in India and at one time he was even the highest income tax payer in India.

Martin despite being a major player has come under several raids and investigations by investigative authorities in India like the police, CBI (the initial CBI case could not proceed due to lack of cooperation from the first elected government in Bhutan), Income Tax Department to recently the Enforcement Directorate of India that raided him and seized Nu 4.5 bn in cash, bank deposits and assets for lottery fraud in the Sikkim Lotteries.

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