In its interim report on lotteries and gambling in South Africa (1994), the then Lotteries and Gambling Board observed that “illegal gambling deprived the state of tax”, and that regulated gambling would provide a source of income that could provide tax relief.
It was proposed by the board that the government acknowledge gambling as a “social reality” and seek to regulate the industry and ensure that some of the profits from legal gambling be used to support the Reconstruction and Development Programme (RDP), welfare, and other good causes”. This was the birth of the National Lotteries Commission (then Board), which opened its doors in 1999, with the sole mandate of regulating lotteries, sports pools and prohibiting any illegal or unlicensed activities in the sector. Lotteries around the world are used to generate funds for charitable causes, and South Africa established the same to supplement donor funding to non-profit organisations.
The national lottery and sports pools are operated by a company that is issued a licence to operate for eight years by the minister of trade, industry, and competition. At present, that company is Ithuba Holdings – a level 1 B-BBEE company that employs 144 direct employees – and they have the responsibility of ensuring that all activities are conducted with integrity while generating funds to support good causes. This licence will lapse at the end of May 2023. Across the globe, lotteries are a symbol of hope. For many South Africans, the prospect of winning a life-changing jackpot has them daydreaming about the “one thing” that they would do for themselves or their families with those six lucky numbers. In just the past year, 67 lottery millionaires were created from jackpots with a total of R3.1-billion in prizes.
For hundreds of thousands more South Africans, it means that their lives are bettered daily from lottery funding, as a percentage of every ticket sold goes towards funding good causes to aid society in enhancing the social welfare programmes of government.
As a regulator, the NLC oversees compliance with the licence agreement, where the operator has the responsibility to ensure innovation in their operations to increase revenue for distribution to good causes that uplift communities, and to attract new players.
Changing lives is the golden thread that runs through the lottery value chain.
The NLC’s supplier development programme has a strong focus on procurement of locally produced goods, and partnerships with other bodies to develop and capacitate suppliers on procurement matters.
In the 2018/19 financial year, around 74% of the commission’s procurement spend went to B-BBEE companies, with a spread between women-owned enterprises, youth-owned businesses, and those owned by people with disabilities.
Over the years, the retail footprint of the national lottery has grown significantly, and since 2015 steps have been taken to empower and upskill retailers to increase their efficiency, to increase the sustainability of the retailers themselves, and develop female retailers even in the informal sector beyond being a portal for selling tickets.
The expansion of the lottery retailer network also indicates a telecommunication infrastructure that has the integrity to increase access to play for marginalised communities, supported by e-commerce platforms.
Other offshoots that grow from the lottery ecosystem come through the linkages that the operator forms with banks and other partners as they strive for innovation to maximise revenue.
The implementation of the operator’s social responsibility programme, B-BBEE compliance, supplier development initiatives, and economic empowerment requirements are also monitored by the NLC.
Last year this supplier development programme funded 82 black-owned businesses.
- Mafela is the NLC’s head of communications
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