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Telecom promotions, games of chance, lottery and the law

Tue, 16 Aug 2011 Source: Dowuona, Samuel Nii Narku

– Part II

Feature by: Samuel Nii Narku Dowuona

The first edition of this article sufficiently pointed out that the two separate legal documents that established the National Lotteries Authority (NLA) and the Gaming Commission of Ghana, left no ambiguity about what “game of chance” was and what “lotto” was. The two were clearly defined in their respective Acts of Parliament – The Gaming Act, Act 721, 2006, and the National Lotto Act, Act 722, 2006.

It was also clear that the Gaming Commission was mandated to regulate, monitor, supervise and control ALL games of chance, except National Lotto, organized by any organization other than the NLA; but no organization, apart from NLA was allowed to operate and regulate lottery.

Whereas Act 721 clearly defines ‘game of chance’ and the Act 722 also defined ‘lotto’, none of the two acts defined lottery. It is not clear whether the framers of the law assumed that ‘lottery’ was a derivative of ‘lotto’ so there was no need for a separate definition of ‘lottery’.

Indeed that lacuna has given room for the courts to come up with its own definition, or at best a definition of the term ’lottery’ from sources outside of the Act that established it; and it is upon that basis that the NLA has hauled the Gaming Commission and Vodafone Ghana to court seeking to quash the powers of the commission to grant a permits for what is clearly a game of chance as defined by Act 721, and also to prohibit Vodafone from carrying on with that game of chance called ‘More Money’.

Not much can be said about the details of that case until the courts determine it. But that does prevent a discussion of previous judgements, and of issues raised at the separate press conferences that the NLA and the Gaming Commission held to state their positions prior to the NLA’s suit.

Indeed this is not the first time NLA is taking the Gaming Commission and or a telecom operator to court; in fact, as it sued the Gaming Commission and Vodafone, it hinted of popping out of an ongoing case it filed against Gamaing Commisison and Tigo; and there is another one against Airtel, which is also pending. Those would also be discussed briefly.

But before touching on the key issues mentioned above, it is important to state that as a keen watcher of the industry, one cannot gloss over that fact that prior to Vodafone, Airtel and Tigo, there have been similar text and win promotions by market leader, MTN but the NLA never even coughed about it, much more going to court.

It is quite disturbing to observe that even though MTN went through V-Mobile and organized “text and win” promotions with the permission of the Gaming Commission and charged as high as 75 Ghana pesewas per text message, NLA sat by and watched that go on and never said a word. One wonders what changed between that time, and through the time Airtel launched its Freedom to Dream promotion (in which there was no premium text message charges) till now.

It is difficult for one to look past the “silent noise” from the fact that the Director-General of the NLA, Kojo Andah is the direct brother of the former MTN Chief Marketing Officer, under whom MTN organized the 75 Ghana pesewas “text and win” promotion, George Kojo Andah. Could it be that the NLA decided to let whatever MTN did pass because of that blood relation? As we speak now, George Kojo Andah has left MTN, and MTN is not doing any direct premium rate promotion; so again, could it be that NLA has found the current state of affairs convenient to go after the competitors of MTN? How come the NLA has never gone after MTN, or even challenge V-Mobile’s dealings with the Gaming Commission? These are hard questions that remain to be answered.

It is important to state, that this is not at all about MTN, but about the double standards at the NLA in letting MTN off the hook, for whatever reason, and taking on other telecom operators in such aggressive and vicious manner. Moving past those questions, the NLA said at its press conference that it has successfully restrained Tigo and Airtel from their respective lottery activities. But what the NLA did not tell the public was whether those so-called lottery activities were approved by the Gaming Commission in the first place. The fact was that the Gaming Commission looked at the Tigo House Promotion and the Airtel Freedom to Dream and realized to the extent that there was not premium charges involved in the two promos, they did not qualify as games of chance as defined by Act 721 so the commission dissociated itself from them. NLA managed to make a case that the two were lottery and restrained them, but they are entirely different from the Vodafone “More Money” game.

But, as stated above, NLA’s definition of lottery is not in the Act 722, so it remained to be seen where the courts came up with that definition, which seems to be an attempt to rope in the features of games of chance as defined by the Gaming Act.

The NLA picked its definition of lottery from a previous judgement in a case between it and Tigo. That definition might have been borrowed by the judge from another jurisdiction yet to be determined. It read “lottery is the distribution of prizes by chance where the persons taking part in the scheme make a payment or consideration in return for their participation in the process of winning or obtaining the prizes.”

The judge also added that although the definition of ‘consideration’ varies from country to country, generally, consideration means that a willing participant is required to purchase something or pay for access to be eligible to enter the game.

NLA therefore derived that the three main elements of lottery as per the judge’s definition are (a) distribution of prizes, (b) must be done by chance and (c) there must be some actual contribution made by the participants in return for their obtaining a chance to take part in the lottery.

Clearly, this definition, of which the source yet remain to be known, seems to be an attempt to encapsulate what ‘game of chance’ is, and thereby suggest that NLA is actually the regulator of games of chance and has the sole mandate of operating games of chance, and by inference the Gaming Commission is either responsible for something else or is a mere white element.

That is why the NLA has sought from day one to create the impression that the Gaming Commission cannot grant permits on game-by-game basis because it has no Board, so its powers are limited to giving only annual licenses to organizations to run games of chance, which is now being redefined to mean lottery. Indeed the NLA could not quote a single line in the Gaming Act to support the claim that the Gaming Commission is only there to issue annual licenses. This is because no such provision exists in the law.

Prior to this current position about the powers of the Gaming Commission, the NLA unilaterally drafted a certain questionable document called Terms of Settlement in which it tried to limit the regulatory powers of the Gaming Commission to casinos and betting machines. The NLA tried to get the Gaming Commission to endorse the debatable document, but the latter did not, and Tigo allegedly signed and were caught in the NLA’s web, for which they are struggling today.

But the framers of National Lotto Act, Act 722 were wise enough to have defined lotto as “a scheme for the distribution of prizes by lot or chance especially a gaming scheme in which one or more tickets bearing particular numbers, draw prices and the rest of the tickets are blanks”.

This definition of lotto in the law is not far from the Oxford English dictionary’s definition of LOTTERY. The Oxford English Dictionary defined “lottery” as “A SYSTEM OF RAISING MONEY BY SELLING NUMBERED TICKETS AND GIVING PRIZES TO HOLDERS OF NUMBERS DRAWN AT RANDOM; SOMETHING WHERE THE OUTCOME IS GOVERNED BY LUCK.”

Other definitions of Lottery from the web are as follows:

1. A method of raising money by selling NUMBERED TICKETS and giving a proportion of the money raised to holders of numbers drawn at random.

2. A method of raising money in which players select A SMALL GROUP OF NUMBERS OUT OF A LARGER GROUP PRINTED ON A TICKET. If a player's selection matches some or all of the numbers drawn at random the player wins a proportion of the prize fund.

3. A contest in which tokens are distributed or sold, the winning token or tokens being secretly predetermined or ultimately selected in a random drawing.

If this is how the originators of the English language defined ‘Lottery’ then it even worsens the confusion as to the origin of that definition of lottery in the said judgement, which the NLA is now flying around. Even single definition of lottery has something to do with numbered tickets or at least, numbers. But that is conspicuously missing from the courts definition.

Again, Section 25 of the National Lotto Act clearly stated that winning lotto or a lottery for that matter involves drawing numbers and permutation of numbers. In the telecom promotions, there are no tickets bearing particular numbers, and there is no permutation of numbers, so it raises questions about the courts definition, and makes it difficult for one to understand the point of the NLA in this whole saga. The NLA also claimed the state is losing GHC100 million per annum to lottery activities by organizations other than the NLA, but that suggestion could be flawed by the fact that organizations pay a permit fee worth five per cent of the total value of prizes to the state through the Gaming Commission. Does the NLA want to tell the public that, that money is no good unless it goes through the NLA?

Besides, what kind of double standards is this – when one operator did all the rewards promotions without paying anything to NLA, Ghana did not lose any money. But all of a sudden the NLA has realized Ghana is losing GHC100 million because there are no family ties between the NLA boss and people at these other telecom companies.

It is important to remember that NLA has lately been hanging on straws just to make more money and cut down on other people’s earnings. It begun with slashing the commission of lotto writers and now they are on telecom operators. In all these, it is important to find out how creative the NLA has been on its own in generating revenue for the state, apart from trying to reap where it has not sowed.

When the NLA took Tigo and Airtel to court, the then MTN Boss, Brett Goschen said MTN disagrees with the suite and the judgement against the two companies and hinted that all the telecom operators will join forces at the Ghana Telecoms Chamber level and stand with the two to fight a course which has implications for all operators. One more operator, Vodafone is now in court, and that concerted effort remains to be seen because the CEO of the Chamber, Kwaku Sakyi-Addo said the issue has not come to the discussion table at the Chamber yet.

At this point, it might be worth the while of Parliament to call back the two Acts that established NLA and Gaming Commission and make amendments that would rid the laws of all ambiguity and lacunas so that no one would draw from other sources to create this kind of opportunity for scavengers and vampires to seek their pound of flesh and pint of blood from telecom operators.


Columnist: Dowuona, Samuel Nii Narku