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Lottery: Battling to save millions of jobs amidst COVID-19

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Amidst the impacts of COVID-19 pandemic on the nation’s economy, Special Duties Minister and a lottery operator, Western Lotto signed an agreement that may lead to over three million Nigerians losing their jobs. In this piece, AARON OSSAI examines how 24 lottery operators battle to avert the situation.

Licensed Lottery Operators Forum, an umbrella body of lottery operators and Western Lotto Nigeria Limited has been at loggerheads over the rightful owner of Ghana games in Nigeria with Western Lotto claiming exclusive ownership of the trademark.

The two lottery operators whose activities are of interest to the federal government due to huge revenues they generate to the nation’s Gross Domestic Product, GDP were invited by the Standing Committee of the House of Representatives on Governmental Affairs in a bid to resolve the issue amicably and avert possible loss of revenue.

The rift between the two organizations began on December 12, 2019 when Western Lotto Limited, a new lottery operator commenced an action against the National Lottery Regulatory Commission, NLRC and 24 other lottery operators claiming the exclusive right to use and play the Ghana games in Nigeria asking the Court to prevent other lottery operators from playing and using the Ghana games without paying commission to Western Lotto.

Western Lotto claimed that they have been granted the exclusive right to use and play the Ghana games in Nigeria and that the power was granted to them by one LMC VAGS, a company located in Ghana via an agreement dated November 28, 2019.

The company also insisted that fellow operators and competitors should seek approval/register with Western Lotto to make use of numbers generated outside Nigeria which means Operators should connect to a ‘Ghana games’ server set up by Western lotto, grant access to Western Lotto’s consultant who should have access to operators’ servers for audit purposes and pay Western Lotto royalty for the use of Ghana games.

But in his presentation at the stakeholders meeting, the chairman, Licensed Lottery Operators Forum, Mr. Chima Onwuka was of the opinion that the purported franchise from National Lottery Authority Ghana (NLA Ghana) amounts to usurpation of regulatory function.

He recalled that NLA Ghana paid a courtesy visit to National Lottery Regulatory Commission, NLRC and indeed Lagos State Lotteries Board a few years ago with the aim of claiming royalty for the use of Ghana games by Nigerian operators.

According to him, the NLA was unable to establish clear basis for computation of royalty neither could it make a convincing claim of its rights to revenue generated outside its primary jurisdiction-Ghana.

For the record, he continued, Ghana games like EuroMillions (European lottery) and Powerball (American lottery) are lotteries set up within specific jurisdictions, but it is common practice for these game numbers to be used by operators and players outside the jurisdiction once they become public. This is not considered illegal as long as the operators using the numbers do not take/accept bet from the primary jurisdiction.

For instance, no Nigerian lottery operator accepts bets from Ghanaian players hence there is no violation of Ghana’s lottery laws. Also, Euromillions and Powerball are offered to Nigerian players without recourse to or expectation by the European and American promoters of the games.

Mr. Chima Onwuka said the main grouse of his Forum is that instead of pursuing the Court case it instituted in 2019, there are attempts by Western Lotto to enter into Agreement with Ministry of Special Duties and by extension National Lottery Regulatory Commission, NLRC that will be presented as Terms of Settlement with the intention to bind all operators stressing that as lottery operators, they individually and collectively reject any such Agreement.

According to him, “The revenue allocation in the agreement is a clear breach of Section 23 of the National Lottery Act. Specifically, the allocation of 4% of proceeds to National Lotteries Trust Fund is a violation of the requirement for operators to remit 20% of proceeds to the Trust Fund”, he said.

Essentially, Western lotto’s wished-for revenue allocation means 11% of revenue generated within, from and by Nigeria will be disbursed to a Consultant (nominee of Western Lotto) and ultimately to a foreign jurisdiction- Ghana. Should this be acceptable to the government of a sovereign country?

He argued that revenue generated in Nigeria should be dedicated and payable to Nigerian government for the benefit of Nigerians.

However, while the House of Representatives was trying to resolve the matter and ensure government did not unnecessarily lose revenue, the Minister of Special Duties via a letter compelled the National Lottery Regulatory Commission to sign the agreement in a way vindicating the fears of the Chairman, Licensed Lottery Operators Forum, Mr. Chima Onwuka.

Expectedly, the Forum through its chairman has kicked against the agreement. Onwuka, in a statement said the forum, has not only perused the National Lottery Act 2005 as amended by the 2017 amendment but also sought legal guidance and is totally convinced that the NLRC is acting ultra vires and incontrovertibly beyond the scope of the statutory powers conferred on it by signing the Agreement.

The questions are: is Western Lotto seeking to use the regulatory authority to validate a defective title? Has Western Lotto lost faith in the judicial system considering this was its first port of call? Why are other parties (2nd to 25th defendants) to the suit excluded from deliberations on and around the terms of settlement? The truth is that after that hearing, the House Committee said all parties in the agreement must be involved and that if any party is not satisfied, it can explore legal means.

Unfortunately, while they were delaying laying their report to the whole House, the Minister got wind of it and wrote a letter to the Director-General of the NLRC mandating it to compulsorily sign the Agreement within seven days. The chairman said when he saw the agreement on Monday; he looked at it and found out that what they signed could not hold in court of law.

He said at the same time, he got notice that the Western Lotto has withdrawn the case in Court to pave the way for the Agreement to serve as a consent judgement. While that was going on, the Consumer Protection Council, CPC sought to be joined in the pending suit instituted by Western Lotto, describing the Agreement as anti-competition as it became glaring that it was done against a better judgement of the Court.

One of the things the Licensed Lottery Operators Forum wants the world to know is the question on how a Lottery Commission backed by the Special Duties Minister sign an agreement to repatriate five per cent of funds generate in Nigeria to sister agency in Ghana? How can an operator become a regulator and have indirect control over numbers being generated in Ghana?

The action of the Special Duties Minister and the National Lottery Regulatory Commission if not reversed will definitely kill other competitors in the industry and go a long way to kill the integrity of numbers generated in Ghana.

“Our stand is that no single operator should handle that thing alone; it is not done because, first of all, we are all competitors in the same market.

“We are therefore asking the Commission and the Minister who insisted through a letter mandating the DG to sign the Agreement within seven days, what is the special interest in the agreement, how much has the Western Lotto remitted, in the words of Executive Secretary, National Lottery Trust Fund, Western Lotto remitted N5 million in five years and they want it to be supervising somebody who is remitting between N100 to N200 million annually with other small ones remitting between N20 and N25 million.

“Our concern is that should anything happen to this sector, no fewer than three million Nigerians would be out of job. For instance, in the South West alone, the industry is employing directly and indirectly over two million people while in the South East, we should be talking of one million people while on monthly basis, about 750 terminals are being energized across the country that employs at least five people each”, he said.

He pleaded that what the industry needs now is palliative because of the impact of the Coronavirus pandemic on the industry stressing that very soon the regulators will start coming after his members for remittance recalling that the Information Minister, Lai Mohammed did the same for media houses affected by the impact of the pandemic.

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