Andhra Pradesh to Consider Allowing Lotteries & Real Money Gaming to Boost Revenue

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Andhra Pradesh is considering lifting the ban on state lotteries and online gaming as part of its efforts to increase tax revenue. The government aims to generate up to ₹13,100 crore through various additional taxes and cesses, according to a report by BusinessLine.

The state’s Finance Department has circulated the proposals among relevant departments, and Chief Minister N. Chandrababu Naidu is expected to make a decision soon. A senior official stated, “Multiple approaches are being explored to generate revenue from these segments.”

Key Revenue Proposals

• One Percent Cess on State GST: Expected to generate ₹4,700 crore.
• Increase in VAT on Liquor and Certain Products: Expected to generate ₹6,500 crore.
• Taxation of State Lotteries and Online Gaming: Currently banned, their legalization could create new income sources.
• Excise Duty Hikes: The government is considering increasing excise duties to raise more revenue.
• Motor Vehicle Tax Revisions: Expected to generate ₹600 crore.
• Green Tax on Polluting Industries: Proposed to address environmental concerns while generating revenue.
• Surcharges on Property Transactions: Likely to be introduced to enhance tax collection.
• Professional Tax Increase: Estimated to generate ₹1,000 crore.
• Stamp Duty Revisions: Expected to bring in ₹500 crore.
• Entertainment Tax on Amusement Parks and Recreational Facilities: Proposed to increase revenue from tourism and leisure activities.

Increasing tax revenue is crucial for the state government, given the need to develop infrastructure in the state to attract investment and to continue the mega welfare schemes being implemented in the state as part of pre-poll promises under the Super Six Schemes.

High Court Consideration

The Andhra Pradesh High Court is set to hear a matter related to these financial measures on March 26, 2025. The court’s decision could impact the implementation of certain proposals, particularly regarding regulatory oversight and revenue allocation.

Budget Estimates and Financial Goals

The state’s budget estimation for 2025-2026 stands at ₹2,17,976 crore, with a revenue deficit of ₹67 crore. The state’s tax revenue is projected at ₹1,09,006 crore, while non-tax revenue is estimated at ₹19,119 crore. The state currently relies on ₹57,566 crore from central taxes and ₹32,284 crore in grants-in-aid. By implementing these new measures, Andhra Pradesh aims to reduce its dependence on central funds and increase its own tax collections.

The government has clarified that funds generated from lotteries and gaming will not be used for the development of Amaravati. Instead, the state will secure loans from multinational corporations to fund capital development projects.

Regulatory Measures and Future Outlook

The potential legalization of state lotteries and online gaming is a significant move, considering their past prohibition. If approved, this policy shift could provide a substantial financial boost while also introducing regulatory frameworks for these industries. Officials emphasize that proper monitoring mechanisms will be in place to regulate these sectors.

A final decision is expected soon as the state evaluates the economic impact and regulatory aspects of the proposed changes.

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