Armenia Tries to Cool Lottery Fever

Thursday, 18 December, 2003

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Naira Melkumyan

"I have spent about 10 dollars on lottery tickets, and won nothing. I have no money, so I just came to see if anyone actually wins," said a woman in a ragged coat, holding a cross-eyed 8-year-old by the hand, at a lottery outlet in central Yerevan.

"We are going to win a car, because I want one very much," said the child emphatically."

Armenia's airwaves are teeming with lottery commercials. Both local television channels and radio stations, and rebroadcasts of Russian ones, feature happy winners, mostly rural residents, urging everyone to play and win. "Buy a lottery ticket, and your dream will come true," promised the charismatic presenter of one of Armenia's nine lotteries. "You can make money, lots of it, without leaving your home."

Thousands of tickets are sold in pursuit of prizes that range from the lavish to the modest. Every week someone wins a car, a cash prize of between 400 and 100,00 drams (between one and 566 US dollars), a prepaid mobile phone card, a fan or an iron.

Now the Armenian government is moving to impose tougher restrictions on the lottery business, as worries grow that it is out of control.

A new law will come into effect on January 1, 2004 along with amendments to the advertising and stamp duty laws, restricting lottery commercials to nine minutes a day and one minute an hour, and upping the annual tax on it from 44,000 to 177,000 dollars. It also bans people under 18 from participating in the draws and their associated commercials.

The Armenian lottery industry had its first boom in 2000, when there were some 35 registered lottery companies. Armenia then passed legislation increasing license charges for the latter. The measure drove all of them out of business, except for two.

The new legislation, however, is unlikely to curb enthusiasm for the draw, which appears to be rooted people's sense of hopelessness and despair.

"When you lose faith in yourself, you either become religious, or you buy a lottery ticket," explained Yerevan resident Rita Sarkisian.

Suren Harutiunian, an architect, admitted lotteries were like a drug for him. "When you have no job and no money, this could be your chance to get a new lease on life," he said.

An elderly woman complained that her grandson steals money from family all the time to buy lottery tickets, "We've had endless arguments about this."

"Impoverished, socially disadvantaged people are particularly vulnerable to the promise of instant riches," said Agasi Arshakian, parliamentary deputy for the opposition National Unity Party. "They will give their last bread money for that hope. Look at the people who play. You will never see successful, professional people at a lottery booth," he said.

"This is a rip-off through and through. No one ever wins. Those so-called winners are simply friends of the owners, or else they pay someone to parade as happy winners."

One parliamentary faction recently argued it was time to re-impose a state monopoly on lotteries, arguing that the new legislation fails to address the root cause of the problem. "It would be in the consumers' interest if we banned private lottery operations," said Khachatur Sukiasian, a prominent Armenian businessman and deputy.

"It is obvious that this business cannot be honest, because the lotto hosts print their own tickets, and know which of them will win."

Nationalisation seems unlikely as long as some of the lottery owners are well-known Armenian businessmen, such as Ruben Hairepatian, chairman of the Armenian Football Federation. Arshakian alleged that some government officials and financial tycoons have a finger in the lottery pie - so are keen to see the industry thrive.

"It seems that government agencies are especially liberal, even protective when it comes to the lottery business," agreed Ermine Nagdalian, a member of the parliamentary commission on finance, credit, budget, and economics. "Even if they make tougher laws, they still make sure they don't ruin the industry."

But deputy finance and economics minister David Avetisian insists the government is taking proper steps to make the lottery business more honest and transparent.

"It is the duty of the state to regulate the industry, and it does regulate it. It was the government's initiative to impose tougher restrictions on lotteries. Soon we will have fewer lottery companies on the market," he told IWPR.

The lottery owners themselves insist they are doing nothing wrong. Edik Oremian, director of the vastly popular Shakhokh Lotto (Win Lotto), charged that the anti-lottery lobby is pursuing its own business agenda. "No one really cares about the common man, and all this talk about lotteries not being fair is completely groundless," he said.

Psychologist Vadim Georgiadi doubts the new legislation will change much. "Having fewer entities in the market is not going to make a difference," he said. "Miracles are in demand, and there's nothing lawmakers can do about it."

Meanwhile, as long as people like Vrezh Avetisian are happy, the lottery business will continue to prosper. He is a farmer from the village of Jrashen in the Oktemberian region and he came to Yerevan to claim the car he'd recently won. "This is my first big win in four years," he said. "I thank those who run this lottery. I didn't bribe anyone. I just bought a ticket and won."

Naira Melkumian is a freelance journalist based in Yerevan.