The structure of lotteries in Russia
The market consists of three levels:
- 1-and. Organizers (Ministry of Finance, Ministry of Sports, Ministry of Defense, Spetsstroy of Russia). Mainly taxes from lotteries are used to finance sports. The total amount of deductions from 2014 year exceeded ₽ 15 billion.
- 2-and. Operators (Sportloto and Gosloto).
- 3-and. Distributors. There is one distributor in Russia - JSC "Technological Company" Center "of Armen Sargsyan. It is this organization that owns the Stoloto brand.
SMARTGUIDE comment: "Stoloto" is a monopolist in the lottery market. Despite, that the operators and organizers are state-owned companies and ministries, in fact they are on the sidelines. Stoloto deducts taxes from the proceeds, and keeps the remaining profit. Because of this, legal Russian lotteries cannot be called state ones., since the government indirectly controls them.
The lottery market is not transparent. Unknown, by whom and how control is exercised, What are the parameters used to check the fairness of the draws?.
"Stoloto" independently deals with all organizational issues: issues tickets, holds draws, pays prizes. The company's revenue is growing every year. According to experts, in 2019 it reached ₽ 60 billion.
SMARTGUIDE comment: over the past few years, the number of ticket buyers and lottery participants has grown by almost 5 times - with 5 % to 24 %. This largely explains the growing performance of Sargsyan's company.
Revenue is not income
₽ 60 billion may seem like an impressive amount. But Stoloto's income is only a small part of this money. How revenue is distributed:
- No less 50 % from the sale of all tickets goes to the formation of the prize fund. This is a requirement of the Law "On Lotteries" in force in Russia. Winnings are paid regularly. According to statements by Stoloto representatives, every month between the participants they share RUB 1–2 billion.
- 10 % the difference between the proceeds and the prize fund - tax deducted to the state.
The remaining funds go to Stoloto. But this is not profit. Money is often used to print tickets, carrying out of drawings and related expenses. As a result, the company's net profit is 10-20 %.
SMARTGUIDE comment: although the law requires playing at least 50 % from ticket sales, in some Stoloto lotteries, the prize fund includes up to 80 % collected funds.