Chamber of Indigenous Business & Investors dismisses Fourth Estate’s NLA-KGL report

The Chamber of Indigenous Business & Investors has criticised the Fourth Estate and the Media Foundation for West Africa (MFWA) for its latest exposé on the National Lottery Authority (NLA).

According to the investigative report, the Authority gave away a GH¢3 billion prime business to KGL Technology Limited in exchange for GH¢170 million annually.

The Fourth Estate has also stated that the contract signed in 2024 was for 15 years, with automatic renewal for another five years after expiration.

However, Alistair Nelson, the Executive Director of the Chamber, says facts and data from the Authority show that the Fourth Estate and Media Foundation for West Africa (MFWA) were sensational and exhibited ignorance when it comes to lottery operations.

Below is their response

15 years Contract of KGL

KGL Technology Limited is not the only company having a 15-year agreement with the National Lottery Authority (NLA). For the avoidance of doubt:

1. Lots Services Ghana Limited had a 15-year contract with NLA in 2013, subject to automatic renewal of another 15 years after expiration.
2. Simnet Ghana Limited had a 10-year contract with NLA in 2015, subject to automatic renewal for another 10 years after expiration.
3. Alpha Lotto Limited and some Private Lotto Operators signed a 10-year contract with NLA in 2024, subject to automatic renewal after expiration.
4. All the Lotto Marketing Companies currently doing business with NLA in the Kiosks and using Point of Sale Terminals (POSTs) were issued licenses in 2006 in accordance with Section 58 (Transitional Provisions) and 57 of the National Lotto Act, 2006 (Act 722). These Lotto Marketing Companies have been in operation for the past 19 years.
5. There are also Lotto Receivers who were previously working with the then Department of National Lotteries (DNL), and these Lotto Receivers were admitted as Lotto Marketing Companies under the Act 722. These companies have been doing business with the National Lottery Authority (NLA) for the past 40-50 years.

Contract of KGL

KGL Technology Limited has no “Contract” with the National Lottery Authority (NLA).

The arrangement between NLA and KGL is a Licensing Agreement issued by the Board of the National Lottery Authority (NLA) in accordance with Sections 5, 6, 7, 8, 9, 10, 11, 12, 13, & 14 of Act 722, and Regulations of 12 & 13 of L. I. 1948.

All licensing agreements issued by NLA to Lotto Marketing Companies, Collaborators and Private Lotto Operators have NEVER gone through the procurement process since they are NOT procurement contracts but rather licensing agreements in accordance with Act 722 and L.I. 1948.

Therefore, it is very misleading for the Fourth Estate and Media Foundation for West Africa (MFWA) to conclude that the NLA-KGL deal is a contract. That is very unprofessional, making the submission highly unethical.

NLA Gave Away A GHS 3 Billion Business to KGL for Peanuts

For the avoidance of doubt, the National Lottery Authority (NLA) was NOT operating any GH¢3 billion business before KGL started operating in Ghana. The highest gross revenue ever generated by NLA before KGL was GH¢401,711,318 in 2017. As a matter of fact and backed by data, the NLA has NEVER generated GH¢3 billion annually since its establishment in 1957.

The National Lottery Authority (NLA) used 8 years to generate GH¢2,766,159,507, and out of the GH¢2.7 billion, the NLA used GH¢1,378,104,374 to pay winning tickets to the staking public.

Below are the revenues generated by the National Lottery Authority (NLA) from 2013 to 2020 before the active operationalisation of the KGL licensing agreement:

2013 – GHS 255, 229, 663

2014 – GHS 315, 918, 378

2015 – GHS 365, 529, 893

2016 – GHS 397, 750, 549

2017 – GHS 401, 711, 318

2018 – GHS 381, 038, 324

2019 – GHS 349, 220, 308

2020 – GHS 299, 761, 074

Total Revenue generated by NLA for 8 years (2013-2020) = GHS 2,766,159,507.

Therefore, Fourth Estate lied to the public about the annual revenue of a GH¢3 billion business of NLA being given away to KGL based on the aforementioned data.

Below are the Lotto Prizes Payments made by NLA from 2013-2020:

2013 – GH¢122, 407, 648

2014 – GH¢156, 414, 997

2015 – GH¢172, 349, 847

2016 – GH¢203, 687, 057

2017 – GH¢209, 545, 892

2018 – GH¢179, 326, 708

2019 – GH¢171, 375, 506

2020 – GH¢162, 996, 719

Total Payments of Lotto Prizes (Winners of National Lotto) for 8 years = GH¢1,378,104,374.

This should inform the Fourth Estate and Media Foundation for West Africa(MFWA) that lotto money is NOT the same as revenue generated by GRA.

NLA used eight years to generate GH¢2.7 billion and pay 1.3 billion to the winners of the National Lotto within that same eight years.

GH¢170 million Peanuts Paid by KGL to NLA

So far NLA-KGL deal is the best at the NLA, and below are the facts:.

From 2013-2020(8years), NLA paid only GH¢182,009,000 to the Consolidated Fund. Below is the breakdown of payments to the Consolidated Fund by NLA:

2013 – GH¢25,000,000

2014 – GH¢11,850,000

2015 – GH¢33,270,000

2016 – GH¢16,000,000

2017 – GH¢30,000,000

2018 – GH¢33,927,000

2019 – GH¢16,962,000

2020 – GH¢15,000,000

The above figures indicate that the annual payment of GH¢170 million by KGL to the Consolidated Fund through NLA exceeds all the individual figures paid by NLA itself to the Consolidated Fund from 2013-2020.

For the avoidance of doubt, the amount of money paid by KGL to NLA from 2019-2024 (five years) exceeds the amount of money paid by NLA itself to the Consolidated Fund from 2013-2024, and this is the ABSOLUTE FACT.

Therefore, everything shows that the NLA-KGL deal is one of the best regardless of the propaganda by the Fourth Estate and Media Foundation for West Africa (MFWA).

Does NLA Have the Capacity to Operate the 5/90 USSD Short Code?

1. In accordance with Act 722 and L.I. 1948, the NLA cannot sell lottery products/tickets directly to the staking public as a Lotto Marketing company.
2. The NLA has to depend on Lotto Marketing Companies or Collaborators, or Private Lotto Operators to sell lottery products/tickets to the public.
3. Under Act 722 and L. I. 1948, NLA has no power to pre-finance Lottery operations.

Is KGL the Only LMC ever to Have Operated 5/90 USSD?

1. In 2008, NLA, in partnership with a private company, operated NLA 5/90 USSD, termed as “Mobi Game 2 Sure”, but the project FAILED.
2. In 2015, NLA, in partnership with a private company, operated “Mobile 5/90”, but the project FAILED.
3. In 2019-2020, NLA, in partnership with a company, operated NLA 5/90 USSD(*890#), but the project FAILED.
4. In 2020- 2021, Alpha Lotto Limited started the illegal operations of NLA 5/90 USSD(*896#,) but the short code was legally shut down by NLA and NCA.

Why Exclusive License to KGL?

1. The National Lottery Authority(NLA) has NEVER given multiple USSD and Web Online lottery license agreements to Lotto Marketing Companies or Collaborators, or Private Lotto Operators to operate one lottery game or product.
2. All License Agreements based on USSD and Web Online are exclusively preserved for the operation of one particular lottery product. Below are some of the examples of USSD and Web Online EXCLUSIVELY operating a specific lottery product or game:

(a). 787 is exclusively for Wotiriyie Lottery

(b). 766 is exclusively for Atena

(c). 959 is exclusively for NLA 5/90

(d). 446 is exclusively for Daywa Lotto 5/39

(e). 946 is exclusively for Pick4/Pick1

(f). 987 is exclusively for Lucky 3

Therefore, it is extremely FALSE that KGL is unfairly enjoying a monopoly of NLA 5/90 USSD and Web Online.

Payments to the Lotto Account

1. In fulfilment of Section 32 of Act 722, KGL makes quarterly payments to the NLA for onward submission to the Lotto Account as a requirement for the pre-financing of the lottery operations.
2. In alignment with Regulations 13 and 14 of L. I. 1948, KGL is empowered to pay winners of National Lotto via the *959# short code.
3. In fulfilment of Section 2(4) of Act 722, KGL is responsible for all the losses on the *959# short code, and all the losses of KGL throughout the operations of NLA 5/90 USSD and Web Online will NOT be compensated by the State or from the Lotto Account provided for under Section 32 of Act 722.

Conclusion

It is very imperative for the Fourth Estate and Media Foundation for West Africa(MFWA) to understand that the operations of KGL never started from GH¢3 billion, and also, if KGL stops operations, that supposed GH¢3 billion business would NEVER be automatically available for the State.

Also, we would like the Fourth Estate and Media Foundation for West Africa(MFWA) to remember that NLA has ZERO(0) investments when it comes to the:

1. Cost of IT infrastructure and its periodic maintenance.
2. Cost of daily payment of WINNING TICKETS to the staking public. KGL has been responsible for all the Liabilities and Risks associated with the operations of 5/90 USSD.
3. Cost of Marketing
4. Cost of Technical Fees
5. Daily operating FEES charged by MTN, Telecel and AirtelTigo

Payments of Taxes to GRA by KGL

From 2019 up to date, KGL has NEVER defaulted in the payment of taxes to the Ghana Revenue Authority(GRA), and the records are available at the Ghana Revenue Authority(GRA).

Finally, the investigation by the Fourth Estate and Media Foundation for West Africa(MFWA) is completely bogus and believed to have been executed with malicious intentions.

….Signed…
Mr Alistair Nelson
Executive Director

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