New Delhi: Lottery king Santiago Martin sold himself as a businessman who made his empire worth several thousand crores of rupees from nothing. An examination by The Reporters’ Collective into his financial maze reveals that the fountainhead of Santiago’s business empire, Future Gaming and Hotel Services Private Limited that does lottery business, has been hollowing out exchequers of several states to fuel his empire spanning over 12 sectors, including real-estate, healthcare, hospitality, textiles and software and technology.

Santiago’s lottery company popped up in the news recently when it topped the list of electoral bond donors to political parties that would have substantial sway over the policies that affect his financial empire.
The business of Future Gaming remains baffling with its high revenue, mysteriously low profit and eye-popping high electoral bond donations -- higher than their profits -- to political parties. It donated Rs 1,368 crore in total, of which over Rs 540 crore went to Trinamool Congress, Rs 509 crore went to DMK, Rs 159 crore went to YSR Congress, Rs 100 crore went to the Bharatiya Janata Party, Rs 50 lakh to Sikkim Democratic Front  and Rs 80 lakh to Sikkim Krantikari Morcha, reveals fresh data disclosed by the State Bank of India.

The web of cross-holdings and directorships of Martin Santiago and friends, who donated Rs 1,368 crore to political parties from just one company

In the financial year 2020-21, the company earned Rs 15,653 crore in revenue but recorded a profit of only Rs 56.97 crore. Though the profit margin for the year was 0.36%, the company donated Rs 150 crore through electoral bonds to DMK and YSR Congress, reveals the fresh set of documents released to the Election Commission by the SBI after the Supreme Court came down heavily on the banker for not providing the details to link the donor with the recipient of electoral bonds.

On Monday, the Supreme Court criticised the State Bank of India for selectively disclosing electoral bond details. While revealing who donated how much, the bank had withheld crucial codes needed to match the donors with the recipients. Consequently, the Court ordered the bank to disclose all details on electoral bonds purchased and redeemed, including unique codes, to the Election Commission.

Future Gaming was incorporated in December 1991 in Coimbatore, Tamil Nadu with the main objective of acting as “sole selling agents” or distributors of lotteries of state governments and to conduct allied activities. 

Santiago Martin and Manickka Gowder Sivaprakash are the directors of the company, which operates in several states. While Martin holds directorship of over 110 firms, most of them are Limited Liability Partnerships, Sivaprakash is director in around 20 companies.

The Indian lottery market is conservatively estimated to be around $33 billion annually with corresponding revenue for the government projected to be approximately $26 billion, but Santiago’s lottery business, spread across 13 states, has been giving them peanuts.

In the financial year 2021-22, Santiago’s lottery company earned a revenue of Rs 20,865 crore but showed a profit of only Rs 49.43 crore, a profit margin of only 0.23%. But it donated Rs 544 crore to political parties, which was six times the profits made that year.

In the financial year 2022-23, it donated Rs 328 crore to political parties while its total profit was Rs 48.30 crore. In this year as well, its revenue was, as usual, very high at Rs 22,965 crore, while its profit margin was as low as 0.21%.

The company donated Rs 5 crore to BJP in financial year 2023 in modes other than electoral bonds, according to the party’s disclosure to Election Commission.

In 2024, it spent Rs 341 crore on electoral bonds. The corresponding figure for its profit before tax is yet not available.

The astronomical gulf between the company’s revenue and profit, and its magical ability to cough up donations many times its profit to political parties indicate that the company has been funnelling away money meant for state exchequer.

Lottery schemes by state governments allow them to raise money from participants and distribute prizes to those who win the lots. State governments collect tax on the sale of lottery tickets. The Lottery (Regulation) Act, 1998 empowered central and state governments to make rules for regulating the schemes. But in 2010, rules under the law allowed only state governments to organise these schemes and appoint selling agents or distributors for them.

Santiago Martin’s lottery group has time and again featured in the reports of Comptroller and Auditor General (CAG) for irregularities in lottery businesses. In 2017, CAG report on Government of Nagaland reported that Future Gaming Solutions India Private Limited engaged in “collusive bidding” in 2012 to gain government contract as distributor of lottery- three of the companies in the bidding were the same group and the fourth was connected to Future Gaming Solutions.

The CAG pointed out that the state government (of Naga People’s Front) instead of disqualifying the company, awarded it the contract.

CAG reports for several states found that the distributors of lotteries were making “huge profit from sales proceeds” whereas state governments (Nagaland, Mizoram) received only the Minimum Guaranteed Revenue. In Mizoram lottery between FY 2012-13 and FY 2014-15, the state government “received a paltry revenue of Rs 24.45 crore” which made up only 0.22% of gross sales, while the distributors did not deposit the rest. Future Gaming Solutions was a sub-agent in the lottery scheme.

If some of these cash-hungry states had gone after Santiago for their honest share of revenue, it could have helped them generate a financial windfall for them, which could comfortably propel many of their welfare schemes.

For example in Kerala, which runs its own lottery, the receipts from state lotteries were Rs 11,892.88 crore for 2022-23.

Pahle India Foundation, headed by former Vice Chairman of NITI Aayog Rajiv Kumar, in a January 2024 research titled “Lottery In India” by Ishan Joshi and Harshvardhan Singh, reported: The Indian lottery market is conservatively estimated to be around $33 billion annually with corresponding revenue for the government projected to be approximately $26 billion, including potential earning in the form of taxes and profit at $12 billion which could be used to fund social sector schemes.

The paper compares this with the FY 2023-24 budget of $7.2 billion for MNREGA, $4.5 billion each for National Health Mission and National Education Mission.