Reduction of lotto Commission by the NLA to 20%

FACT SHEET

National Lottery Authority announces the reduction in Retailer Commission Payment from 25% to 20% effective 1st- February, 2011

Accra, 28TH February Rd-The Fortune House, Dec 15, 2010 –In the 2011 Financial Year Budget statement presented to Parliament and delivered by Honourable Minister Of Finance And Economic Planning Dr. Kwabena Duffuor,(Page 64, Section 207) captioned: Automation and Modernization Programme of the National Lottery Authority,he was quoted as saying ‘as part of the National Lottery Authority’s (NLA) automation and modernization programme, it will deploy ten thousand (10,000) points of sales terminals during the year. This will create at least 10,000 jobs for new lotto marketing companies, and facilitate the participation of the remaining banker to banker and former private lotto operators in the lotto marketing business as defined under the lottery Act 722. New products will be introduced and commissions restructured to increase NLA’s contribution to the treasury’.

Automation and Modernisation program of the National Lottery Authority

The rapid transformation and diversification of the operations of DNL/NLA in recent times is largely attributed to the strategic initiatives introduced by the Board and Management with the full support from the Government.

This started in 2006 after the passing of the National Lotto Act 722 and is still in progress.

? INVESTMENTS TO IMPROVE SERVICE DELIVERIES

i. Staff Recruitments

The NLA has made huge investments in staff recruitment, training and retention programs to attract the best professionals which have helped the organization to achieve the year on increase in revenue to the consolidated fund for National development.

ii. Fast Pay and Prize Redemption Points

Another key innovation by the NLA is the payment of lottery winners through its partner banks and some designated payment points called the ‘fastpay’ system. This idea was inspired by customer desires to have their lottery wins paid promptly as this was not the case in the past.

iii. Fast Credit

Lotto Marketing Companies can now buy e-lottery credit for their TPM3000 (GPRS or online Users) and the new PADPM EFT930G and sell it on to its customers as electronic lottery tickets. This we believe will cut transportation cost and time spent at NLA Regional and District offices as the banks will now be closer to the retailers to access such a service.

iv. Automated Commission Payment System-

Retailer commission payments have been automated well enough to issue accurate commissions due over 8,000 retailers every month. Retailer data and profile are properly stored for accountability (taxes) and transparency.

? INVESTMENTS IN INFRASTRUCTURE/TOOLS/EQUIPMENT

i. Branch expansion scheme- the NLA has opened branches in all 10 Regions and 7 District offices across the country since 2006 with state of the art equipment and well trained staff to manage all transactions related to our operations.

ii. Purchase of 10,000 Portable Automatic Data Processing Machine (PADPM)

This latest acquisition comes at a time when patrons of NLA lottery games have come to embrace the existing automation machines, TPM 3000 which started the NLA e-lottery ticketing process in 2006 which over 3,000 in circulation across the country.

Some of the key strengths of the NLA in its accelerated growth in the Automation and Modernisation program include the purchase of 10,000 Portable Automatic Data Processing Machine (PADPM) to enhance the distribution and sale of lottery products.

Key Benefits of the PADPM/Automation Project to Retailers

The new machine (PADPM) -EFT930G, (one of the highest qualities on the market) will run on the GPRS system and will afford both players and retailers the following benefits;

i. Free distribution to all LMC’s

ii. Sustained connectivity thus more selling and playing time as it works on 3 different SIM Cards through the GPRS/via Satellite

iii. The handy or portable nature of the PADPM will help retailers to send the lottery products to the doorsteps of patrons; thus lottery products can now be accessible by all, anywhere and at all times across the nation.

iv. The PADPM offers/ has other revenue Opportunities such as;

• Additional games

• Payment center for Utility Bills/Service Bills

• Money Transfer

• Mobile Top ups

? NEW CHANNELS OF PLAY

The NLA is continually researching and developing new services, lottery games and channels to suit the demand of both its old and new customers.

It has in 2008/2009 introduced the Mobi-game platform which has the Mobi-game 2sure and Mobi-Jackpot lottery games with the latter being the first Dividend Game to be introduced in Ghana and played via the mobile phone.

COMMISSION PAYABLE TO LOTTO MARKETING COMPANIES OR RETAILERS A CASE OF THE NLA VS. OTHER JURISDICTIONS

The NLA under National Lotto Act 722 is mandated to pay monthly commissions to lotto Marketing Companies or retailers who retail its products. These Lotto Marketing Companies since year 2000 have enjoyed 25% in commissions at the point of purchase of lottery products from the NLA.

The NLA has over many years paid the highest commission rates to its retailers in comparison to other lottery jurisdictions.

The average commission paid to retailers of lottery products in other jurisdictions is between 7%-10% on the African continent, 5.0% in Europe and 6% in the Americas.

The table 1 below gives an overview of how much in Percentages retailers in other lottery are paid:

Table 1

Country Commission Payable To Retailers In Percentages To Sales %

Ghana 25%

South Africa 5%

Nigeria 7%

National Lotto-United Kingdom 5%

Pennsylvania Lottery-USA 5%

Chile Pollana- Chile 5%

It also worth mentioning that the Lotto Marketing Companies, one of the key partners of the NLA has been well resourced with the needed equipment and services (free lottery machines, free paper rolls, subsidized GPRS fees, free servicing of the lottery machines, bank service charges on their commission payments etc) to effectively retail their products and are positioned to make huge returns on their investments.

To reflect the new face of lottery operations in Ghana vis-a-vis the creation of an enabling environment and the investments made so far by the Authority to position it as a potential and vibrant revenue generating institution for both Government and LMC’s to reap the full benefits from their investments.

It has become necessary however and in fulfillment of the Budget statement read by the Minister of Finance and Economic Planning to increase revenue to the state treasury, the Board of the National Lottery Authority in consultation with the Ministry Of Finance And Economic Planning have reviewed downwards the commission payout to Lotto Marketing Companies from the current flat rate of 25% to 20% effective 1st February, 2011.

The Government and the Board of the NLA believes that the 20% commission rate which is still the highest paid to Lottery retailers, will reflect the new face of lottery operations in Ghana vis-a-vis the creation of an enabling environment and justify the investments made so far by the Authority to position itself as a vibrant revenue generating institution for both Government and Lotto Marketing Companies (LMCs).