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Subhash Chandra to try his luck through online lotteries

Anusha Subramanian

Media moghul Subhash Chandra and other promoters of the Essel Group have entered the online lottery business.

Under online lotteries -- a roaring business abroad, especially in the US, and which has produced at least one known winner in New Delhi, customers can select their numbers by punching them on their webpage.

The Essel promoters have floated a new company called Playwin Infravest Pvt Ltd, entirely held by the promoters.

R K Singh, who has been appointed head of all new projects under the Essel umbrella, will be the chief executive officer of Playwin Infravest. He will eventually relinquish his position as chief executive officer of Zee Telefilms.

Playwin Infravest, in turn, will have two subsidiaries, one for each of the states in which online lottery is legally permitted.

While one subsidiary, Tashi-Delek has been awarded the contract to manage the Sikkim State Lottery, another subsidiary Ultra Entertainment Solutions, has won the mandate for the Karnataka State Lottery.

Playwin will put up 5,000 terminals across more than 200 cities and 14 lottery playing states.

The company expects to begin operations by the first quarter of next year. Playwin has also identified over 500 agents for the smooth running of the lottery draws. The draws will be shown live on Zee TV with a celebrity host.

The promoters are making an initial investment of Rs 3 billion in the new venture, spread over the next 4-6 months.

Playwin Infravest CEO designate R K Singh said: "The entertainment business is very vast. The Essel group has the expertise in most segments and is very well positioned in this business. There are lot of synergies as well in all the business we are engaged in.

Organised gaming is one area where we did not have a presence and hence we thought we should get into this as well."

The company is currently in the process of setting up the infrastructure for the online business, which includes high tech lottery terminals built on a technology platform borrowed from a US-based company, International Lottery Tetalizator Systems Inc.

As regards the revenues likely to be generated from this business Singh said: "We are looking at clocking Rs 6-Rs 7 billion in the first year thereby recover our investments that we will be making. We will definitely not make profits for the first two years, but definitely in the third year we should be breaking even."

Internationally, the lottery business is a $125 billion per annum business, unlike in India where the offline business clocks close to Rs 500 billion (approximately $10 billion) per annum.

Singh expects the online industry to capture at least 10 per cent of the Rs 500 billion market to begin with.

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