Critics are arguing the new government’s proposed online lottery for retirement savings is a weaker tool for building savings than the previous administration’s “retirement lottery” programme.
Former deputy finance minister Paopoom Rojanasakul said he is concerned that this is an attempt to avoid implementing the retirement lottery by merely changing the name and format, resulting in a less effective programme.
He said the online lottery for retirement savings is less efficient than the National Savings Fund’s (NSF) retirement lottery. Under the online lottery system, for each 80-baht ticket purchased, the Government Lottery Office (GLO) allocates a portion of its 17% share of sales revenue (normally used for administrative costs) to a savings account for the ticket buyer.
In practice, this means the maximum amount from an 80-baht ticket diverted to a savings account is roughly 13 baht, and likely it will be even less, said Mr Paopoom, also deputy leader of the Pheu Thai Party.
In contrast, under the retirement lottery the full 50-baht price of each ticket is deposited into the buyer’s retirement savings account, regardless of whether the ticket wins a prize.
He said the online lottery savings plan stipulates ticket buyers on online platforms agree to a portion of their purchase allocated to their savings accounts.
These accounts can only be withdrawn when the holder reaches age 55, or after being held for at least five years. For older buyers, such as people age 58, they must hold the account for another five years before withdrawing the money.
The funds for this programme are allocated from GLO revenue.
Of GLO’s total ticket sales, 60% goes to prize payouts, 20% to the national treasury, 17% to GLO activities, and 3% to operating expenses.
Meanwhile, the retirement lottery programme under the NSF, which has already been passed by parliament, is designed as a tool to encourage retirement savings, with lottery prizes as an incentive.
Anyone age 15 or older, regardless of NSF membership, can purchase retirement lottery tickets at 50 baht each, up to a maximum of 3,000 baht per person per month.
Five million tickets are issued each week, with draws held every Friday. The top prize is 1 million baht, and there are also three-digit ending prizes of 1,000 baht.
All money used to purchase tickets is accumulated and returned to buyers when they turn 60.
People older than 60 can still buy tickets, with the money returned five years after the initial purchase.
The government provides the budget for prize payouts. If all prizes are claimed each week, the cost is 15 million baht weekly, or about 780 million baht per year.
If there are no winners for a given draw, prize funds roll over to the next one.
The NSF’s retirement lottery aims to increase retirement savings among Thais, particularly among informal workers not covered by savings systems after retirement, such as the Social Security Fund or provident funds.
The NSF has 2.78 million members and expects to reach 2.8 million by year-end.
Thailand has around 21 million informal workers, about half of the workforce.
Independent scholar Aat Pisanwanich criticised the online lottery savings proposal, describing it as “a way of intoxicating people”, using the promise of a certain amount of savings as an incentive.
Instead of spending this money on daily necessities, people may be tempted to spend it on lottery tickets, said Mr Aat.
However, he noted from an investment perspective, the scheme could appear more attractive than depositing money in a bank, where savings interest rates are less than 1%, offering little incentive to save.
Thai commercial banks have a very high interest spread — the difference between deposit and lending rates — of 5-7%, allowing them to reap large profits, said Mr Aat. In contrast, banks in Singapore and Malaysia operate with spreads of only around 2%.