Razak Kojo Opoku (PhD) Writes
First and foremost, I was extremely surprised to read an article from the Fourth Estate shared by Sulemana Briamah, making some comparisons between:
- The Telecom Business Model and the Lottery Business Model of NLA-KGL.
- Dealers and Agents of Scratch Cards for Telecom Companies and Lotto Marketing Companies for the National Lottery Authority (NLA).
Comparing the lottery business to the selling of scratch cards in exchange for commission from Telecom Companies clearly shows that Mr. Sulemana Briamah and the Fourth Estate lack full knowledge, understanding, experience, expertise, and competence when it comes to the lottery industry.
For the purpose of clarity, the Telecom Business Model has absolutely no correlation with the Lottery Business Model.
In fact, both business models operate under different industries and are regulated by different authorities.
The Telecom Business Model is under the regulatory body of the National Communications Authority (NCA), whereas the Lottery Business Model is under the regulatory body of the National Lottery Authority (NLA). The NCA’s laws and NLA’s laws are completely different from each other, so comparing them is quite dishonest.
Based on their assumptions, can the Fourth Estate and Sulemana Briamah give honest answers to the following questions:
- Do Telecom Companies pay winning tickets to the customers of the scratch card dealers and agents on a daily basis?
- Do Telecom Companies pay 25% commissions based on the money used by the dealers and agents to purchase scratch cards?
- Do Telecom Companies conduct “Scratch Card Draws” for the customers of the scratch card dealers and agents?
- Are the Telecom Companies’ regulators the same as the National Lottery Authority (NLA)?
- Did Dealers and Agents of Scratch Cards invest millions of dollars into marketing the cards?
- Did Dealers and Agents of Scratch Cards invest millions of dollars into IT infrastructure and system engineering for the sale of scratch cards to the general public with zero investment from the Telecom Companies?
Providing honest and concrete answers to the above questions would help the Fourth Estate and Sulemana Briamah appreciate the fact that it was unfair to compare the scratch card business of Telecom Companies to the lottery business under the National Lottery Authority (NLA).
Now to the perfect case of the NLA-KGL Deal:
- The Fourth Estate and Sulemana Briamah should kindly take their time to thoroughly read all 58 Sections of the National Lotto Act, 2006 (Act 722) and point out to their followers on Facebook which section of Act 722 specifically mentions NLA paying a commission to a Lotto Marketing Company participating in online lottery.
Can they indicate which specific section of Act 722 talks about Online Lottery?
- Just like the LMCs selling in kiosks using Point of Sale Terminals are required to pre-pay for the NLA coupons, KGL Technology Limited, as an online LMC, also pre-pays each quarter for NLA coupons.
- All the money NLA receives from KGL is paid into the Lotto Account as required by law. It is, therefore, the responsibility of NLA to transfer the net balance into the Lotto Account on a monthly basis to the Consolidated Fund.
The net balance is necessary because what if there is no net balance in the Lotto Account after payments of winning tickets, commissions, administrative, and general expenses by NLA?
If at any point the money in the Lotto Account is not enough to pay winners, the excess can be charged against the Consolidated Fund (Section 33 of Act 722).
However, in practice, NLA has never taken money from the Consolidated Fund to pay winners of the national lotto. Also, it does not make sense to use public funds from the Consolidated Fund to pay winners of national lotto while the country needs funds to take care of important national projects.
- Despite the technology being used by KGL in partnership with the Telecom Companies to sell lottery products, all the monies NLA receives from KGL go into the Lotto Account.
What is the Lotto Account? Let me educate the Fourth Estate and Sulemana Briamah.
The “Lotto Account” is any official bank account operated by the National Lottery Authority (NLA).
- What empirical research has the Fourth Estate or Sulemana Briamah conducted in the lottery industry, particularly the online lottery industry, for them to conclude that about 90% of lotto stakers now buy their lotto on their phones directly using short codes (USSD)?
If 90% of lotto stakers buy lotto via USSD, then how come banker-to-banker lotto operators and agents control 80% of the lottery industry in Ghana?
If 90% buy lotto via USSD, then how many buy lotto via Point of Sale Terminals (POSTs)?
And if only 10% are buying lotto via POSTs, then how many are buying lotto via paper issued by banker-to-banker lotto operators and agents?
If 90% are buying lotto via USSD, then how come Lotto Marketing Companies and Private Lotto Operators and Agents are still actively involved in the lottery business?
- Was NLA successful in experimenting with different technology partners to reap full benefits from online sales of its lotto business?
If the Fourth Estate and Sulemana Briamah care to know, before KGL came on board, the NLA in partnership with private technology companies failed to benefit from online sales of lotto such as “Mobi Game 2 Sure,” “Mobile 5/90,” “NLA 5/90 (*890#),” and “NLA Soccer Cash.”
Has the Fourth Estate, as a patriotic CSO, researched the financial losses NLA incurred during the operations of Mobi Game 2 Sure, Mobile 5/90, NLA 5/90 (*896#), and Soccer Cash?
- Yes, Keed Ghana Limited paid GHC 10 million as a penalty to NLA for piloting *959# without the appropriate 5/90 Online License Agreement, and that was a good decision by both NLA and Keed Ghana Limited.
The general public would also like to know the answers from the Fourth Estate and Sulemana Briamah regarding the following questions:
(a) How much did Alpha Lotto Limited pay to NLA for illegally operating NLA 5/90 USSD and web online lottery via *896# for 11 months?
(b) How much has Onassis Lotto paid to NLA for illegally operating NLA 5/90 USSD and web online lottery via *859#?
(c) How much did operators of www.theb2blotto.com pay to NLA for illegally operating the NLA 5/90 lottery via web online?
The answers to the above three questions would help the Fourth Estate and Sulemana Briamah understand that they are being unprofessional in their investigations against the NLA-KGL deal.
The decision of NLA not to pay commission to KGL is supported by Section 2(4) and Section 37(d) of the National Lotto Act, 2006 (Act 722).
Respectfully, I sincerely do not think the Fourth Estate and Sulemana Briamah understand the lottery industry more than the Board Members of the National Lottery Authority (NLA), both current and previous.
- KGL has every legal right to protect its huge investments in setting up a world-class IT infrastructure and system for the sustainability of the NLA 5/90 USSD and web online lottery.
Per precedent, no company was competing with the private company operating NLA Mobile 5/90 or Mobi Game 2 Sure or NLA Soccer Cash at the time such products were in existence. Also, NLA has never given multiple licenses to companies to operate the same NLA product. Every online LMC or collaborator is licensed to operate a specific lottery product.
For example:
959 exclusively for KGL 5/90
766 exclusively for Atena
787 exclusively for Wotiriyie
446 exclusively for Daywa 5/39
946 exclusively for Game Park
987 exclusively for Lucky 3
Also, regarding the duration of the license, NLA has signed 10–15-year license agreements with several Lotto Marketing Companies and Private Lotto Operators in 2024.
Do not forget that Lots Services Ghana Limited and Simnet Ghana have 15-year and 10-year contracts with NLA respectively, subject to automatic renewal for another 10–15 years.
- It is absolutely false that 80% to 90% of lotto stakers in Ghana have moved to buying lotto online using just a USSD short code on their phones, as there is no empirical research supporting this untrue claim.
The business of analogue lotto kiosks owned by private companies and individuals began declining when most of them decided to sell products on behalf of banker-to-banker lotto operators and agents due to the attractive 35–40% commission they received compared to the 25% paid by the NLA.
The aggressive marketing approach, prompt payments, and higher commissions of 35–40% by the private lotto operators and agents collapsed the lotto kiosks business of LMCs, not KGL’s presence in the lottery industry.
- How many companies do the Fourth Estate and Sulemana Briamah think NLA should license to sell NLA 5/90 USSD and web online? Can they provide the names of such companies? In accordance with precedent, has NLA ever licensed multiple companies anywhere in the world to operate one specific online lottery product? Absolutely not.
Again, it is false for the Fourth Estate and Sulemana Briamah to state that a prime business of NLA which generates 80–90% of its revenue has been handed over to one company, KGL.
This argument is fueled by jealousy or envy because KGL started from the bottom and, through huge investments and marketing strategies, has reached where it is now.
At the time KGL started online lottery sales, NLA had zero presence in the online lottery space.
- If NLA used eight years (2013–2020) to pay GHC 182,009,000 into the Consolidated Fund, then any reasonable person would applaud KGL for paying GHC 157.6 million to NLA within one year (2024). How many license agreements or contracts signed by NLA have generated GHC 157.6 million within a year? Absolutely none.
And if you argue that NLA should rather pay commission to KGL, then you may be speaking from the standpoint of financial ignorance. If NLA decides to pay commission to KGL, the Authority will be paying 31% of the gross revenue generated annually to KGL, while KGL will not be responsible for marketing, operations, prize payments, risks, and liabilities associated with the NLA 5/90 USSD and web online.
Let me point out to the Fourth Estate and Sulemana Briamah that KGL would be extremely excited if NLA agreed to pay the company 31% commission, but the question remains: does NLA own the IT infrastructure and systems for running the NLA 5/90 USSD and web online lottery?
KGL initially proposed a revenue-sharing formula with NLA, but the Board, in its wisdom and in accordance with Section 2(4) and Section 37(d), agreed not to pay commission to KGL as an Online Lotto Marketing Company.
The management of KGL Technology Limited, in the interest of the country, remains open to reviews and renegotiations regarding its License Agreement with NLA.
- It is misleading for the Fourth Estate and Sulemana Briamah to create the impression that NLA does not know the amount of revenue generated by KGL. If NLA does not know how much of its digital coupons KGL sells, then how come the Fourth Estate and Sulemana Briamah claim that KGL generates GHC 3 billion annually?
If the GRA is fully aware of KGL’s revenue, how difficult is it for NLA, as the regulator, to know the revenue generated by KGL?
Sulemana Briamah and the Fourth Estate keep mentioning the Lotto Account as if they do not know that the Lotto Account is simply a bank account owned and operated by NLA.
For the avoidance of doubt, KGL’s quarterly pre-payments to NLA always go into the Lotto Account.
Also, can the Fourth Estate mention just one online lottery company in the world being paid a commission by the state for its operations?
Anyone who understands Act 722 and Lottery Regulations 1948 would clearly explain to the Fourth Estate and Sulemana Briamah that paying 31% commission to KGL on the gross revenue generated would be a financial suicide mission for NLA and the State. The Board of NLA is 100% right in rejecting such payment to an online LMC like KGL.
- It is not true that all NLA has left at this stage is the archaic analogue lottery sold in kiosks with just about 10% or fewer lotto stakers.
If only 10% of stakers remain, how come Lotto Marketing Companies have not closed their kiosks?
If it is 10%, how come banker-to-banker lotto operators and agents are still in business making money?
NLA, apart from generating revenue through kiosks, also has the following games in operation:
(a) Caritas Lottery
(b) Atena
(c) Daywa
(d) Wotiriyie
(e) Game Park
(f) Several other modern lottery products.
Respectfully, if Sulemana Briamah and the Fourth Estate had been thorough in their research, they would have realized that not all the alleged GHC 3 billion comes to KGL as profit.
Can the Fourth Estate please help their readers and followers on social media understand how much of that quoted 3 billion was used to:
(a) Pay winning tickets (prize money to winners)?
(b) Pay MTN, Telecel, and AirtelTigo?
(c) Pay for the service, running, management, and maintenance of the IT infrastructure driving the online 5/90 lottery business?
(d) Pay marketing costs?
(e) Pay corporate taxes to GRA?
(f) Pre-pay NLA?
(g) Pay NLA’s Stabilization Fund?
(h) Pay KGL as profit?
If it is true that NLA’s total revenue for 2024, including what it received from KGL, is under GHC 350 million, then what is the basis of the Fourth Estate and Sulemana Briamah’s concerns about the NLA-KGL deal, considering the data below on NLA’s annual revenue trends from 2013 to 2020:
GHC 299,761,074 for 2020
GHC 349,220,308 for 2019
GHC 381,038,324 for 2018
GHC 401,711,318 for 2017
GHC 397,750,549 for 2016
GHC 365,529,893 for 2015
GHC 315,918,378 for 2014
GHC 255,229,663 for 2013
Has the Fourth Estate ever assessed NLA regarding its:
(a) increased number of employees, which adds extra cost to the Authority?
(b) increased payments to technical service providers?
(c) increased commission payments from 20% to 25% on gross revenue?
(d) increased operations of illegal lottery operators and agents across the country?
The 25% commission payments alone to Lotto Marketing Companies make it extremely difficult for NLA to make meaningful gains beyond the quoted GHC 350 million by the Fourth Estate and Sulemana Briamah.
- The current NLA Board and the Minister of Finance are not concerned about the Fourth Estate and Sulemana Briamah saga because:
(a) The Fourth Estate and Sulemana Briamah have failed to establish any form of corruption or suspected corruption regarding the NLA-KGL deal.
(b) They have failed to establish that KGL is taking away a GHC 3 billion business from NLA.
(c) They have failed to establish any breach of Act 722 and L.I. 1948 in the NLA-KGL deal.
(d) They have failed to prove that KGL’s presence is a threat to NLA.
(e) They have failed to exhibit professionalism and ethical leadership in their investigation of the NLA-KGL deal.
(f) They have failed to demonstrate full understanding of the lottery industry.
(g) They are pushing NLA and the Minister of Finance toward a potential judgment debt of over $5 billion against the State regarding the NLA-KGL deal.
Moreover, the Ghana Revenue Authority (GRA) remains quiet about the noise from the Fourth Estate and Sulemana Briamah concerning a GHC 3 billion KGL business because they know the figures, facts, and data presented by the Fourth Estate and Sulemana Briamah are false.
Finally, if the Car Owner (NLA) is satisfied with the performance of the Driver (KGL), who are the Fourth Estate and Sulemana Briamah to question the Car Owner (NLA)?
Which law empowers the Car Owner (NLA) to take over the ownership of the NLA 5/90 USSD and web online lottery (the car)?
Is the Car Owner (NLA) prepared to pay a judgment debt to the Driver (KGL) if it changes the driver?
Does the new proposed driver by the Fourth Estate and Sulemana Briamah have the capacity and competence to pay more or the same amount of money as the old driver (KGL)?
And which law says that an online LMC should strictly be paid by commission while NLA has no ownership over the IT infrastructure and systems built and managed by the online LMC?
Clearly, the Fourth Estate and Sulemana Briamah are attempting to create a negative image around the NLA-KGL deal, but it keeps backfiring.