Kerala's lottery revenue crossed Rs 11,000 crore for the first time in history. The state's major share of tax and non-tax revenue comes from a few key commodities, including petroleum, alcoholic beverages, and lotteries. In 2022–23, lottery sales generated ₹11,892.87 crore, accounting for 78.67 per cent of the state's non-tax revenue.
The state's total own revenue in 2022–23 was Rs 87,086.11 crore, 1.42 per cent higher than the budget estimates. Notably, while the budget had projected lottery revenue at Rs 8,402 crore, the actual figure reached Rs 11,892.87 crore—41 per cent higher than expected, providing a significant boost to the overall revenue.
According to the latest CAG report on state finances, non-tax revenue, which has ranged between 7.51 and 13.59 per cent of the state's revenue receipts over the last five years, saw a substantial increase of Rs 4,655.45 crore (44.50 per cent) in 2022-23 compared to the previous year.
Back in 2013-14, the state lotteries contribution to state exchequer was Rs 3,796 crore. A decade later, this contribution has increased by 213.3 per cent, reflecting a significant rise in revenue from state lotteries.
Other than State Own Tax Revenue and Non-tax Revenue, the other sources of receipts for a state government are the devolution of States’ share in taxes, Grants in aid and transfers from the Union Government and non-debt capital receipts. The share of Grants-in-aid in revenue receipts rose from 12.27 per cent in 2018-19 to 20.63 per cent in 2022-23, indicating Kerala’s increased reliance on the support of the Union government. The State Government received Rs 4,587.79 crore as the central share for the Centrally Sponsored Schemes (CSSs) in the year.
Some critics contend that lotteries disproportionately affect low-income individuals who spend a larger share of their income on tickets. This has led some to describe lotteries as a "tax on the poor”. Notably, lotteries yield significant GST revenue also on the sales value. Against the actual sale proceeds of Rs 11,892.87 crore during 2022-23, the GST collected on sales value is Rs 1,660.52 crore. That brings the total contribution from lotteries to Rs 13,553.39 crore, reaffirming its role as a crucial source of revenue for the state government.
Kerala government, however, claims to spend a major share of revenue it earns through lottery sales on expenses like distribution of prizes and agent commission and that the money is being diverted back to the people. Notably, the state lotteries have a wide distribution network of more than 55,414 agents and over 1.5 lakhs retailers.