labels: essar group, essel group, modi enterprises, entertainment, marketing - general
Gamble combatnews
Mohini Bhatnagar
11 April 2003

So far the Essel group has been monopolising the lucrative online lottery business. Now it has two serious contenders: the Modis and Essar

Mumbai: The Essel group's monopoly in online lottery games may soon come to an end as two companies - Modi Enterprises and Essar Group - are finalising their online lottery plans.

While the former is getting ready to launch online lottery across 13 Indian states, the Essar group is planning to extend its online lottery in three more states. At present Essar's lottery is present only in Nagaland.

Modi Enterprises is launching its lottery branded Sunshine India Lottery through its subsidiary, MWC Market Services Ltd, and has appointed Integrated Technology Solutions Pvt Ltd (ITSPL) as its distributors. The company's preparations to launch its lottery actually began two years ago with the appointment of distributors on a national scale through ITSPL and the roping in of international executives.

The company has appointed Sreekant Gupte, formerly with Marico, as chief executive officer of K K Modi Enterprises (lottery division). It has also roped in Tim Holley, chief executive officer of Camelot, which runs the UK National Lottery, and Alex Burstein, director, GITECH, another online lottery in the UK, to help it design games that is different from its competitors. Plans are afoot to launch Sunshine Lottery through a network of 8,600 online lottery retail terminals at various fast-moving consumer goods (FMCG) outlets across 13 states in the country shortly.

Another player readying to launch its online lottery is the Essar group, which through its group company Essar Teleholding, is rolling out its Fortune lottery in West Bengal, Karnataka and Kerala around the third week of April 2003.

Essar Teleholding first launched its online lottery in Nagaland in December 2002. Essar has invested Rs 80 crore in setting up about 1,800 terminals initially; this will be expanded to 10,000 terminals in 12-18 months with an additional investment of Rs 300 crore. Vikas Saraf, chief executive officer, Essar Teleholding, says Fortune lottery will have a national presence by July 2003.

Essar has a small stake (10 per cent) in the company Cairs Pvt Ltd (Computer Aided Information and Research Services), which has an exclusive agreement with the Nagaland government for managing, distributing and marketing the state's computer lottery under the Fortune brand. The company has the option to increase its stake to 51 per cent in the future.

Essar plans to use its 2.5-million mobile customer base for the online lottery venture and is targeting a turnover of Rs 700 crore over the 12-18 month period after the launch. Saraf says Essar expects to be one of the top three players in the field.

Modi Enterprises is positioning its lottery on the ''transparent and clean lottery platform.'' The company appointed distributors after a 24-month pre-launch research and development exercise wherein it identified a gap for online lotteries, as clean, honest and transparent form of entertainment.

Gupte says Sunshine lottery will be different from other lotteries in more ways than one and the point of differentiation would be that all its 6,000-odd retail outlets will be manned by trained lady executives. Modi Enterprises has put in Rs 350 crore to roll out its online lottery in the country and is expecting a turnover of Rs 1,000 crore in the first year of operations.

Currently, Subhash Chandra's Playwin Infravest enjoys a complete monopoly, as it is the only player in the online lottery market in India with three licenses already to operate for Maharashtra, Sikkim and Karnataka state lotteries. The total lottery business in India is estimated to be about Rs 50,000 crore, but no credible figures are available.

Industry pundits expect the online business to between Rs 10,000-20,000 crore annually within three years. Much of the growth is expected from expanding the market, as only 20 per cent of Indians are estimated to have played the lottery in any form.

Worldwide the lottery market has a turnover of Rs 6,00,000 crore, and in the US and the UK 90 per cent of the adult population has participated in online lotteries at some stage.

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