Illegal lotteries are robbing good causes of valuable support from the National Lotteries Commission (NLC) and it’s time for all stakeholders to work together to solve this scourge. This was the overriding theme at the Roundtable on Regulatory Compliance at the 2015 National Lotteries Commission (NLC) Indaba, in Boksburg, today. The event was part of the NLC’s three-day Indaba themed “Changing Lives”.
Amongst the presenters were the Deputy Minister of Trade and Industry, Mzwandile Masina, UK-based gaming consultant Christina Thakor-Rankin, NLC Commissioner Charlotte Mampane, NLC Chairperson Alfred Nevhutanda, Ithuba’s Head of Department: Lottery Implementation, Len Paster, and CEO of the Gauteng Gaming Board Edward Lalumbe.
Deputy Minister Masina reiterated the fact that illegal lotteries are debilitating the potential of the NLC to support good causes. It is also his view that the NLC, while only five months into its newly legislated existence, is very well positioned to extend its support to more sectors. “Entrepreneurship, for example, may be an avenue for the NLC to explore as a means of addressing the very real challenge of unemployment in South Africa. However, they can’t extend their reach to more good causes unless we curtail the negative effects of illegal lotteries.”
A joint task force, including the South African Police Service, has already been established but Prof Nevhutanda would like to see the NLC being given the mandate to “declare war” on those impinging on the National Lottery. “It is my plea that the DTI gives us teeth to bite!” He adds that the Lotteries Amendment Act, which brought the NLC into being, has a shortcoming in terms of enforcement. “We need to look at regulatory imperatives to identify flaws within the South African legal framework and I believe we need to form a consortium of related entities which are all regulated under the same framework.”
Commissioner Mampane says the operator and regulator must join hands and work with the gambling boards to eliminate unregulated lottery-type games. “Illegal lotteries are prevalent. We have entities and gambling boards in different provinces which are licensing activities which appear to be the National Lottery but are in fact not. A perception of lack of integrity will influence the public’s view of the NLC. A partnership approach is absolutely essential to ensure proper lottery functionality and true protection of the mandated monopoly.”
Thakor-Rankin believes South Africa has a good handle on the challenges our National Lottery faces but advises that, in terms of regulation, the NLC must find a good cultural-fit solution. “I’m yet to meet any regulator who is 100% compliant. In fact, 100% compliancy can actually kill your earnings potential. The key is to find the right balance between regulation and earnings. South Africa needs to look at how to sustain the lotteries sector through the introduction of new games and by improving the odds for players.”
Paster agrees that while it’s easy enough to identify the culprits – who are often big household brand companies – there’s no clear path on prosecution. “If a big corporate is taken to task for running a SMS ‘lottery’ or something similar, they mostly plead ignorance, stop the activity immediately and then resume it again somewhere down the line. It’s very difficult to come down hard on these big companies but penalties need to be better defined or these illegal lotteries will continue to simply feed off the hard work of the NLC.”
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The National Lotteries Commission (NLC) was established in terms of the Lotteries Amendment Act (No 32 of 2013) to regulate the National Lottery as well as other lotteries, including society lotteries to raise funds and promotional competitions. The NLC evolved out of the National Lotteries Board, established in terms of the Lotteries Act No 57 of 1997. The National Lotteries Commission was launched in June 2015. Other responsibilities of the Commission include advising the Minister of Trade and Industry on policy matters relating to the National Lottery and other lotteries. NLC members are also trustees of the National Lottery Distribution Trust Fund (NLDTF), into which National Lottery proceeds that are intended for allocation to good causes are deposited. The NLC does not adjudicate applications for funding or make allocations to organisations. This is done by committees known as distributing agencies which are also appointed by the Minister of Trade and Industry, in conjunction with other relevant Ministers, after a process of public nomination. The NLC provides administrative support to the distributing agencies.