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National Lottery is to promote good causes in societies

*How not to operate the National Lottery Act

From Gbolahan Gbadamosi

Lottery, like other ideas we borrowed from other jurisdictions is a creation of statute.

From the UK and the US, it is clear that lotteries are established by government to either raise funds for a specific project or to augment state revenues or to support educational system. In whichever way, tickets are offered as part of lotteries to enable interested parties participate therein.

Likewise, the National Lotteries Act (NLA) 2005 brought into life the National Lottery Regulatory Commission (NLRC) – see Section 1 – as signed into law by the former president, Olusegun Obasanjo, on March 30 2005.

Lottery in ordinary meaning is “a means of raising money by selling numbered tickets and giving prizes to the holders drawn at random”. See the introductory part when Britain raised money to fund 2012 Olympic Games.

In another word, lottery is defined as:
“(a) A gambling game or method of raising money, as for a public charitable purpose in which a large number of tickets are sold and a drawing is held for certain prizes;
(b)   Any device for distribution of prizes by chance;
(c)    Any happening or process that is or appears to be determined by chance”
A community reading of sections 17, 18, 19, 21, 23 and 25 of the act are on the Operation of the National Lottery, especially Section 19 (1) which reads that “The President may grant license to any person or body corporate to operate a national lottery or any lottery, by whatever name called, if the president is satisfied that the applicant….”
Are the operators of the National Lottery Act implementing the provisions of the statute?  The immediate answer is in the negative.
One immediate case in point to illustrate this is the creative stretch of the NLRC towards ‘regulating’ Consumer Sales Promotions (CSPs) of private sector businesses especially in telecommunications, banking, manufacturing, broadcasting, etc.

To all intents and purposes, CSPs by definition are a variety of short term promotional techniques to encourage customers and consumers to respond in some way. A sales promotion is a typical marketing technique that adds values to a product in order to achieve specific marketing goals. In these categories of CSP are some of the companies that engage in short term promotions which operations are not within the contemplation of the drafters of the National Lottery Act.

It is argued that the Act of the NLRC in issuing letters alleging ‘breaches’ of the provisions of the Act to some companies that engage in short-term promotion is  illegal  as can be gleaned from Section 29 of the Act (Sales of Tickets).

It is my humble submission that companies conducting CSPs do not sell tickets, it is only additional value or incentive for patronising a particular product. The consumer is definitely not engaging in a lottery game as defined by statute because he or she already gets value for his money in terms of the product he or she has paid for.

Another salient point to consider is located in Section 24 of the Act (Application of proceeds of a National Lottery). Subsection (1) reads “A licensee shall establish an operational fund to be known as the “prize funds” into which be paid a minimum return of 50 percent of the proceeds of a National Lottery”, while subsection (3) states that “ A licensee shall pay to the Trust Fund established under Section 35 of this Act within a period not more than 90 days  after the determination of the result of each lottery, an amount of 20 percent of the proceed of the lottery for the first 5 years of the licence, 25 percent in the subsequent 5 years and thereafter 27.5 percent”.

It is to be noted that companies or corporate bodies conducting CSPs do not sell tickets. Thus, there are no “proceeds” out of which they should pay a required percentage to the National Lottery Trust Fund. The Act (NLA) according to the drafters was ONLY to regulate lottery business and not marketing promotions of private business concerns.

Two acts of illegality come to fore here. Firstly, it altered the provision of the Act by creating another class of lottery not known to the law and secondly, it is against the provision of the Act to confer on the NLRC the power to grant lottery permits. The attempt to expand the scope of coverage of the commission by the instrumentality of the regulation to include granting short term permits in place of a licence is not within the contemplation of the Act and therefore it is illegal and invalid. By extension, there is no power granted to the NLRC to seal up any business premises in the Act.

Realising the lacunae in the 2005 Act, the commission is now proposing a parliamentary amendment of the Act that set it up instead of fully executing the mandate reposed in the Act. A look at Section 5.7 (1)(b) of the proposed amended Act  shows an intention to include in the act as part of the functions of the commission, “Regulate the operation and business of promotional lottery in whatever form and whatever name called in Nigeria”. This clearly shows that presently, the commission does not possess such powers. This is a ploy to legalise all their illegal acts like writing to corporate bodies for violating Law on Lottery.

Several of the new areas being sought by the proposed amendment are already covered by existing institutions created by law including the Central Bank of Nigeria (CBN), National Communications  Commission (NCC), the National Institute of Marketing of Nigeria (NIMN), the National Agency for Food and Drug Administration and Control (NAFDAC), Consumer Protection Council (CPC), to name a few.

Flowing from the above submissions, the question is: can something be put on nothing? The answer is a clear “NO” according to Lord Denning (Master of Rolls) in the celebrated case of UAC V Mcfoy when he held that, “you cannot put something on nothing and expect it to stay there. It will collapse”.

It is my considered view that all acts of the National Regulatory Lottery Commission which are not consistent with the law that established it should be reversed. For example, it is unlawful for the commission to compel companies engaging in CSP to pay levies to it as well as closing their business premises. It has no such powers. Short promotional sales is not a lottery, it is a way of rewarding loyal customers.

The Commission should be told in clear language that it needs to restrict itself to the mandate of the Act. It will do well for all to call on the supervising Ministry to compel the Commission to refund all fines it had coerced from some of the corporate bodies involved in CSPs. This is the minimum to accept while it desists henceforth from illegalities. The Commission should restrict its powers to casino operators and others who are selling tickets for lottery purposes.

It is instructive to note that the Supreme Court has not been shying away from striking out some provisions of any Act which is not consistent with the 1999 constitution (as amended). See the AG Ondo State V AG. Federation (2002) 9 NWLR pt. 772 especially at page 310. Here the Ondo State Government challenged the enactment of the Independence Corrupt Practices Commission (ICPC) Act. The apex court while rejecting the application  of the State Government TO INVALIDATE THE Act in totality, however applied Blue Pencil Rule to strike out some sections of the Act.

Chief Justice Muhammadu Lawal Uwais (as he then was) while reading the lead judgment said “applying the Blue Pencil Rule, sections 26 subsections (3) and 35 will be struck down. When this is done the rest of the Act is not affected. So that the good can be severed from the bad. There is no reason therefore to justify the whole of the Act being invalidated as sought by the plaintiff. See Doherty V Balewa (1963)2SCNLR 256; 1963 NWLR 949.

Given the foregoing, should the NLRC now be plotting a parliamentary amendment of the Act that set it up instead of fully executing the mandate reposed by the Act? I dare say that NLRC should be seeking to remediate by making refunds of funds obtained illegally instead of seeking to legalise the illegal acts it had been committing.  The lesson to be learnt is that all Nigerian must wake up and participate when both State’s House of Assembly and/ or the National Assembly is engaging in Public Hearings of bills.

But for now, from the above submission, the NLRC should know that this is not how to operate The National Lottery Act 2005.

Gbadamosi is of Rickey Tarfa & Co., Lagos

 

 

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