Our attention has been drawn to reports on certain media platforms claiming that the staff of the National Lottery Authority (NLA), through their union, the Financial and Business Services Employees Union (FBSEU), have petitioned the Attorney-General and Minister of Justice, as well as the newly appointed Director-General of the NLA, to suspend and review all third-party contracts and licenses granted to Private Lotto Operators (PLOs).
As avid researchers of Ghana’s lottery industry, we find it imperative to clarify and correct several misconceptions and false narratives being circulated against the licensing regime and operational activities of NLA and KGL.
First and foremost, our research has shown that:
1. KGL Technology Limited is a Lotto Marketing Company licensed as an Online Lotto Marketing entity in accordance with Sections 5, 6, 7, 8, 9, and 10 of the National Lotto Act, 2006 (Act 722) and the Lottery Regulations, 2008 (L.I. 1948). KGL Technology Limited is NOT a licensed Private Lotto Operator (PLO).
2. KGL Technology’s exclusive online operations of the 5/90 lottery have always favored the National Lottery Authority, generating over 250 million Ghana cedis annually for the NLA, GRA and the Consolidated Fund, at absolutely no cost or risk to the Authority.
*History of Online(Digital) Lottery Operations in Ghana*
The NLA has historically struggled to operate an online 5/90 lottery due to significant capital investment requirements and cybersecurity threats.
We have been following the development of digital lottery operations in Africa including Ghana since 2006.
In 2006, the NLA through a contract with a Private Company known as Simnet Ghana Limited introduced the automation machines that generate the lottery tickets upon purchase. The system works via GPRS(Online). The acceptance of the automation machines took a while for both the retailers and lotto stakers in the first phase of implementation. The change from Manual(paper writing) to Automation however was absolutely necessary due to the numerous challenges associated with the manual system including fraudulent activities.
The Automation System commenced with the use of TPM machine which were operated by Service Providers Known as Simnet Ghana Limited, until 2009 when the NLA introduced the Portable Automation Machines to completely fade out the Manual System.
The PADPM is the INGENICO SAGEM EFT 930G’. its software application has been specifically designed and manufactured for the NLA for the dispensing of lottery products. The two automated platform ie. TPM and PADPM were operating at the same until the shutdown of the TPM system by its Service Providers (Simnet Ghana Limited) in October 2012.
With the shutdown of Simnet Ghana Limited in 2012, Lots-Services Ghana Limited was introduced in 2013 to provide technical support to NLA alongside INGENICO. Currently the NLA operates on an Automated Platform which is solely technically supported by Lots- Services Ghana Limited, and Simnet Ghana Limited, all are privately owned companies.
In 2008, the National Lottery Authority(NLA) started an online lottery operation known as *Mobi Game 2 Two* via MTN Short Code of 1383 and 5900 on Kasapa and Onetouh Platforms. However, the Mobi Game 2 Sure FAILED to survive on the lottery market after several investments were spent on the digital project by the National Lottery Authority(NLA).
In 2019-2020, the National Lottery Authority(NLA) resurrected the digital operations of 5/90 original lottery especially during the era of the lockdown as a result of the COVID-19 pandemic. The NLA through TekStart Afrika Limited started the digital 5/90 lottery product through a Short Code of *890#.
However, due to Infrastructural challenges, the *890# online lottery platform FAILED to deliver to the expectations of the National Lottery Authority(NLA), and as such, the NLA subsequently SUSPENDED the operations of the *890# digital 5/90 Lotto.
In 2019, KGL Technology Limited through a timely intervention by the National Lottery Authority(NLA) came on board to support NLA in the operations of its 5/90 Digital Lottery products through Public-Private Partnership without any financial cost to the NLA.
To start with the partnership, KGL paid Ten Million Ghana Cedis to the NLA as a penalty fees for test-running and piloting of the *959# Short Code.
In May, 2019, KGL submitted a Business Proposal with detailed strategies on the operations of 5/90 online Lottery. After six months of correspondence and assessment, the Board finally granted a Provisional License to KGL Technology Limited to officially and legally operate 5/90 Original Lottery products on behalf of the NLA via the Short Code of *959# for two years.
A Provisional License was given to KGL because NLA wasn’t sure if the digital lottery project would be a successful one considering the fact that the National Lottery Authority(NLA) has already FAILED Twice in attempts to operationalized the digital 5/90 lottery products.
It is important to state that, since 2019 up-to-date, the National Lottery Authority(NLA) has made ZERO investments in the I. T. Infrastructure used for the management and operations of the *959# digital lottery platform.
After the expiration of the Provisional License, the National Lottery Authority(NLA) issued a 10-year partnership agreement with the KGL Technology Limited to continue the operations and management of the digital 5/90 lottery products on behalf of the Authority for an increased financial burdens on KGL annually.
The NLA further demanded more financial responsibilities from KGL that required serious capital investments into the expansion of digital infrastructure development of KGL, and NLA was not prepared to be part of such financial risk but only interested in the financial benefits from such investments. To safeguard such huge financial risks, there was the need for the Board of NLA to give exclusivity online contract to KGL so that both NLA and KGL will not run at a loss.
So far so good, KGL Technology Limited has satisfactorily FULFILLED all of its Financial obligations to the National Lottery Authority(NLA) per the terms and conditions of its contract.
It is 100% factual that NLA benefits more from the operations of KGL more than any company duly licensed by the National Lottery Authority(NLA) from 2019 up-to date.
*Lotto Draw Procedures*
Unlike other companies licensed by the NLA, KGL Technology Limited does not conduct its own Lotto Draws, whether on television or off. KGL uses the Lotto Draw results provided by the NLA for the payment of winning tickets.
Since its inception in 2019, KGL Technology has successfully operated under two Director-Generals and two separate Boards of the NLA, and currently, working successfully with the Mahama’s government to accelerate *”Building the Ghana We Want”*.
KGL works solely in the interest of the State, and not aligned with any political party.
*Private Business Operations Nature of NLA since its Establishment*
Our research team also revealed that:
1. Since the establishment of the NLA, all operations to generate revenue for the state have been executed through private entities, including:
(a). Lotto Marketing Companies:
Under Sections 5, 6, 7, 8, 9, and 10 of Act 722, these companies are privately owned and sell lottery products on behalf of the NLA for a commission of 25%.
(b). Technical Service Providers:
Companies such as Lots-Services Ghana Limited and Simnet Ghana Limited manage Point of Sale Terminals (POSTs) on behalf of the NLA. These providers also operate as privately owned entities.
It is worth noting that many Lotto Marketing Companies and Technical Service Providers have been working with the NLA for over 25 years.
Unlike KGL Technology, other Technical Service Providers take 4-6% of daily business transactions of the Authority, creating debts for the NLA on daily basis.
2. Due to existing agreements between the Veterans Administration Ghana (VAG) and the NLA, all Private Lotto Operators (PLOs) operating independently of Lotto Marketing Companies were supposed to be licensed under the VAG Act 721 and regulated by the NLA. Thus, any PLO licensed under Act 722 is illegal and requires review and suspension.
Therefore, it is unjust for the Staff Union to create the impression that there is a “deliberate private capture” of the state-licensed and operated lottery business.
*Conditions for Operating Online Lottery*
Following verified independent assessments, we can authoritatively confirm the following prerequisites for consideration to run the digital lottery marketing operations of the flagship 5/90 lottery products in Ghana and across African Lottery Market:
1. Technology Implementation:
Develop and maintain a robust, secure digital lottery management system.
2. Ticket Sales and Distribution:
Enable access to the digital lottery through web and mobile apps, enhancing the existing physical ticketing at retail terminals.
3. Regulatory Compliance:
Adhere to national gaming laws and international standards, including ISO/IEC 27001 and WLA Security Control Standards.
4. Security and Fraud Prevention:
Implement advanced security measures, including fraud detection and encryption.
5. Disaster Recovery and Business Continuity:
Ensure minimal downtime and system redundancy.
KGL Technology meets all of these prerequisites and is ISO/IEC 27001 certified—an achievement no other local Lotto Marketing Company shares.
Extensive research from the Ghanaian lottery market further confirms that KGL Technology’s contract with the NLA provides nearly 90% of their annual revenue.
Without KGL Technology’s contributions, payments of NLA staff salaries and winning tickets at the Point of Sale Terminals (POSTs) would have been extremely challenging for the Authority, particularly since 2021.
This is in addition to all the other financial support KGL Technology has continuously provided to the authority in terms of marketing support, sponsorship of their various programs, infrastructure development, case in point, the refurbishment of Brennan Hall, among others.
*Conclusion*
Parties to these agreements or contracts are legally obligated to fulfill their terms. Consequently, any breach by either party should be addressed in a court of competent jurisdiction.
Therefore, seeking redress at the Office of the Attorney-General and Minister of Justice, as currently suggested by Staff Union of NLA is very inappropriate.
The partnership of NLA and KGL Technology has helped the Government to:
1. Generate substantial revenue at absolutely no risk and cost to the government.
2. Reduce the effects of the illegal lottery operations in Ghana.
3. Minimize the usual stigmatization associated with public staking of lottery.
4. Promote the digitalization policy of the Ghanaian government.
5.Added significant additional value to players across the local lottery ecosystem
It is worthy to note that these agitations by some employees of NLA backed by unforseen forces are not new. In fact, similar falsehoods were peddled in the media during the NPP government(Akufo-Addo’s Government) with the malicious aim to create disaffection even before introduction of the additional digital lottery stream for the NLA as well as other subsequent misinformation with the intent to malign efforts put in to improve the fortunes of the National Lottery Authority, all to no avail.
The growth of the National Lottery Authority is quite evident for all to see.
The NLA does not belong solely to private interests or the government; it belongs to the people of Ghana.
Any entity proven to deliver value to Ghanaians in this sector should be welcomed by all and sundry.
*Issued by: Digital Public Policy Forum*
