The popular two- and three-digit lottery scheme will continue along with the huge jackpot prizes, Deputy Prime Minister and Finance Minister Pridiyathorn Devakula said yesterday.

The abolition of the scheme, introduced by the ousted Thaksin Shinawatra government, would only result in the even more rampant punting in the illegal underground lottery system, he said.

However, an amendment to the 1974 Government Lottery Act would be needed to allot the huge amounts of money earned through the sales of the two- and three-digit lottery into the government budgetary system, in order to make the management of the spending transparent.

Under the current system, the money has been spent too freely and with minimal control, said Pridiyathorn, as it had been mostly allocated to fund populist projects initiated by the Thaksin administration.

Pridiyathorn said he initially thought of moving a Cabinet resolution to regulate the money, but lawyers close to him suggested a legal amendment instead, as it was much more difficult to amend the Act than to alter a resolution.

A Finance Ministry study said the two- and three-digit lottery scheme had drawn around Bt1,000 billion from what could have been entirely spent on underground lottery since it was introduced as an alternative to the government lottery tickets three years ago by the Thaksin administration.

A study by Saowanee Thairungroj, a lecturer at the Thai Chamber of Commerce University, found that out of a total of 72 draws, twice a month on the 1st and the 16th, Bt28,267 million had been earned. Most of the money was used for funding 48 projects initiated by the Thaksin government.

Of the Bt28 billion, only Bt8.87 billion had been submitted to the Government Lottery Office under various conditions.

The Office of the Auditor-General of Thailand has questioned the new lottery system all along, saying the operation involved four illegal conditions.

First, it violated the 1935 Gambling Act and the 1974 Government Lottery Act. The new scheme was launched with the permission of a Cabinet resolution in 2003 - an executive order of lower authority than both Acts that prohibit it.

Second, the Revenues Department imposed no taxes on winners in this lottery scheme while those winning government lottery prizes are burdened with the duty.

Third, the money earned through sales has never been added to the government's coffers.

Fourth, there are virtually no rules governing the spending of the money earned through the new lottery scheme.