By:A business desk Report

For lack of knowledge and accuracy of information, people indeed perish, and this is exactly how sabouters of KGL Technology Limited are seriously perishing with their unsustainable media agenda.

However, let me use this opportunity to further educate the unrepented sabouters about the operational mandate of NLA under Act 722 and L. I. 2008(1948) as follows:

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Razak KoJo Opoku (PhD)

*LMandate of NLA
The section 2(Objects of National Lotto) and Section 4 of Act 722 are underpinning and operationalized by Sections 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 23, 24, 25, 26, 28, 29,32, and 33 of the same Act 722 regulated by Sections 1, 2, 3, 4, 5, 6, 7, 12, 13, 14,15, and 16 of Lottery Regulations, 2008(L. I. 1948).

The implications of the aforementioned sections of Act 722 and L.I. 1948 are that NLA does NOT directly have to sell lottery products to the staking public BUT through third-party companies such as Lotto Marketing Companies(LMCs via Kiosks & POSTs/TPMs, and Online LMCs, which KGL is a licensed Online Lotto Marketing company), Technical Service Providers, Collaborators, Telecos, and Suppliers. Bear in mind that, all the third-party companies are 100% Private entities.

As a matter of fact, the Provisional License of KGL Technology Limited was jointly signed by Kofi Osei-Ameyaw as the Director-General, and Togbe Francis Albert Seth Nyonyo as the Board Chairman of NLA.

The final license of KGL Technology Limited was signed by Togbe Francis Albert Seth Nyonyo as the Board Chairman, and Awuku as the Director-General of NLA.

Legal Backing of KGL- NLA Contract
There is absolutely NO legal violations, and absolutely NO state capture agenda by KGL that contravenes Act 722.

With the greatest of respect, the Solicitor-General representing the Attorney-General and Ministry of Justice on the Board of NLA who was re-appointed by H.E. John Mahama would NEVER allowed such legal violations to occur in relations to KGL-NLA Contract.

The contract of KGL went through all the right processes of law, and proper scrutiny in accordance with Act 722, L. I. 1948 and other relevant laws of Ghana.

The current arrangement between NLA and KGL is 100% ethically right and 100% LEGALLY right under Act 722 and L. I. 1948.

Section 2(2) and Section 4(1) are strictly implemented using Sections 5(1), 6, 7, 8, & 9 of Act 722, and Sections 12, & 13 of L.I 1948. Also, Section 15 of Act 722 is implemented using Sections 16, 28, 9 & 10 of Act 722, supported by Sections 7, 12 and 13 of L. I. 1948.
Therefore, it is very myopic for anyone to conclude that Section 2(2), Section 15 and Section 5(1) are impediments to the licensing of Private entity like KGL Technology Limited by NLA to operate 5/90 lottery products via short code(USSD) and online space.

Furthermore:
1. KGL Technology Limited is selling National Lotto products empowered by Sections 12 of L. 1. 1948 fully supported by Sections 5, 6, 7, 8, 9, 10, 16, and 20 of Act 722.

1. Sections 13, 14, and 16 of L. I. 1948 empowers KGL Technology Limited to collect proceeds of NLA without pre-finance nor logging such proceeds with NLA. This is rightfully so, because NLA does NOT pay any commission to KGL as stated under Section 28 of Act 722.

2. Sections 2(4), 25, & 26 of Act 722, and Section 13(1, 2, 3, 4, 5, & 11) of L. I. 1948 empowers KGL Technology Limited to pay winning tickets to the staking public.

Let’s me reiterate that, it is absolutely FALSE that in the absence of KGL Technology Limited:
1. NLA can generate GHS 6 billion annually in revenue.
2. Deliver over GHS 3 billion in gross profit, and
3. If properly optimized, can earn up to GHS 12 billion in revenue, and GHS 5 billion in profits annually for national development.
Even Ghana Revenue Authority(GRA) or Bank of Ghana(BoG) cannot even dream of such aforementioned figures, not to talk of games of chance or running of highly volatile industry like lottery whereby winning ratios can easily exceed revenue generated on daily basis leading to debts and deficit for the NLA. In fact, there is no historical data or current scientific data that supports the aforementioned figures quoted by people who are seriously ignorant and misinformed about the lottery industry in Ghana.

What Ghana and NLA Stands to Gain with the continuous existence of KGL Contractual agreement with NLA are as follows:
1. Generation of substantial amount of revenue to the State. Absolutely no public funds will be lost.

1. Create sustainability for the National Lottery Authority(NLA) as well as empowers NLA to strengthen its legal and regulatory authority especially in the digital space.

2. Ensure that NLA compete fairly and squarely against the illegal lottery operations in Ghana as well as empowers NLA to take the full dominance in the digital space.

3. Operate always in accordance with Act 722 and L. I. 1948, and never will KGL ever attempt any entrenchment of State capture at NLA.

4. Consistently deepen public confidence in democratic governance by assisting NLA to generate revenue in the digital space, pay winning tickets promptly on behalf of NLA, as well as commit to undertaking CSR activities in full alignment with Section 2(3) of Act 722.

The rants and demands by any group of people or sabouters against KGL in relation to cancellations of KGL Contract with NLA is indeed laughable. If Mahama’s government, the Board and Management of NLA are willing to pay a judgement debt of US$ 20 Billion then they can proceed with the cancellations of KGL Contract.

There is no justification to call for restoration of legal compliance with Act 722 because there is NO violation of any sections of Act 722 by KGL-NLA Contract.

The Legal Exclusivity license of KGL is purely in the interest of NLA, and also serves as insurance for both NLA and KGL in highly volatile industry like lottery operations.

An independent forensic audit is probably needed for the contract of :
1. NLA-Lots Services Ghana Limited.

1. NLA-Simnet Ghana Limited.

2. NLA-B2B License under Act 722 because NLA has no legal rights to license B2B companies under Act 722. NLA can only license Private Lotto Operators(B2B) under Act 844, and accordingly share the proceeds from the license fees with Veterans Administration, Ghana(VAG).

3. All other third-party contracts serving as liabilities and taking huge amount of monies from the National Lottery Authority.

4. NLA-Blue Star Lotto arrangements.

The Real Problems at NLA
After carefully scrutinizing all the third-party contracts with the National Lottery Authority(NLA), we can authoritatively state that, the contract between NLA and KGL Technology Limited is the best so far since the establishment of the National Lottery Authority(NLA), further creating value for money to the Authority.

All third-party contracts at NLA takes money away from the Authority EXCEPT KGL Technology Limited which rather gives substantial amount of money to the Authority on yearly basis at no cost and stress to the Authority.

Below is the Direct Cost Expenditures of the National Lottery Authority(NLA) on daily basis:

1. Payments of Lotto Prizes(winning lottery tickets) – 50% of the gross revenue generated.

2. Payments of lotto Commission to the Lotto Marketing Companies operating via the kiosks using the Lots Services Ghana Limited platform or Simnet Ghana Limited platform – 25% of the gross revenue generated.

3. Payments of Technical Services Fees to Lots Services Ghana Limited – 5% of the gross revenue generated.

4. Payments of Technical Services Fees to Simnet Ghana Limited – 6% of the gross revenue generated.

5. Payments of Technical Services Fees to other service providers – 6% of the gross revenue generated.

6. Payments of GPRS Fees to the Telecos – 1.5% of gross revenue generated.

7. Payments of Thermal Paper Rolls Fees to Suppliers – 1.5% of the gross revenue generated.

8. Payments of Maintenance Fees (POSTs Fees) to Lots Services Ghana Limited – 1% of the gross revenue generated.

Therefore, Total Direct Cost Expenditure on Lotto Intake (84%) excluding Other Revenues. The remaining 16% shared between NLA(about 6%) and the Consolidated Fund(10%). This implies that, the National Lottery Authority(NLA) only retains 6% of the gross revenue generated from daily sales of lottery products. The 6% is subsequently used by the Authority to service its indirect Cost Expenditures.

Per the existing arrangements between NLA and the third-party contracts, the Authority is always indebted to the Technical Service Providers, Telecos, Suppliers of thermal paper rolls, staking public, and Lotto Marketing Companies, and this indebtedness always become worsening whenever the winning ratios after draw exceeds 50% of the gross revenue generated.

The best form of Public-Private Partnerships(PPPs) between National Lottery Authority(NLA) and the technical service providers such as Lots Services Ghana Limited, and Simnet Ghana Limited should have been the charging of 6% on net profit after the deductions of Lotto Prizes (50%), LMC/ Receivers Commission (25%), Thermal Paper Rolls(1.5%), GPRS Fees of Telecos (1.5%), and the cost of Sales and Marketing Expenses.

The Lots Services Ghana Limited signed an initial contract of fifteen(15) years with NLA subject to review and renewal whereas Simnet Ghana Limited also signed ten(10) years contract with NLA subject to review and renewal.

The Indirect Cost Expenditures of the National Lottery Authority is as follows:

1. Selling, Distribution, and Marketing Expenses including Business Promotions, CSR Activities, Good Cause Expenses, Sales Rewards, Courier Services, and Others.

2. Personal Emoluments such as Salaries, Wages, Staff Training, Staff Allowances, Staff Insurance, and Other Staff Cost.

3. Maintenance Cost of PPE ( Plant, Property, and Equipment).

ICT Problems at NLA
The information technology infrastructure of National Lottery Authority(NLA) is not highly secured as compared to the indigenous banks and any other financial institutions in Ghana. Due to these unsafe infrastructure, NLA is not able to pay winners directly from its ICT systems.

To attest to this, NLA has Collaboration agreements with Nsano Ghana Limited and Etransact Ghana Limited which pay small amount of lotto prizes to winners on behalf of NLA. If indeed NLA has the secured ICT infrastructure it would definitely not need such payment Collaborations.

As we speak the NLA together with its Technical Services Providers might NOT have ISO certifications but KGL Technology Limited has ISO Certification for its ICT infrastructures, meeting the highest international standards.

Licensing of Private Lotto Operators(B2B)
The proceeds from the licensing of Private Lotto Operators and Agents popularly known as “Banker-to-Banker Lotto” though brings in revenue to the Authority but unfortunately the revenue generated from license fees are very poor and highly insignificant considering the market dominance of the B2B lottery operations covering about 80% of the market share of the lottery industry.

Yearly, all the license fees collected from Private Lotto Operators and Agents will NOT exceed GHS 30 million.

Also, it is important to draw the attention of the current Board that all Private Lotto Operators and Agents can only be licensed under section 22 of the VAG Act 844, not Act 722, and it is very vital for the current Board and Management of the Authority to correct the errors of Awuku-Gary administration of licensing Private Lotto Operators and Agents under Act 722.

Challenges of NLA
The main challenges facing National Lottery Authority in its revenue mobilization efforts are:
1. Illegal lottery operations, constituting about 80% of the lottery industry.

1. Stigmatization of lottery staking.

2. Direct Cost Expenditures to the Technical Service Providers(6%+ 6%=12%) and Telecos(1.5%)

3. Rainfall, seriously affecting sales in the Lotto Kiosks.

Conclusion
The EXIT of KGL Technology Limited SHALL completely Collapse NLA. Without KGL, NLA can NEVER pay its employees, pay winning tickets, and pay their indebtedness to third-party contracts.

KGL has NEVER taken any money away from the NLA, and NLA too has NEVER paid any money to KGL Technology Limited. It is as simple as that.

KGL-NLA Contract is 100% backed by Act 722 and Lottery Regulations, 2008(L.I. 1948).

“Yɛbɛ ti nsem bebreee” against KGL so Ghanaians particularly the staking public should not perturbed.

Issued by: Razak Kojo Opoku, Former Head of PR, NLA under Osei-Ameyaw Administration