Former Director-General of the National Lottery Authority (NLA), Samuel Awuku, has made significant proposals to the government through Ghana’s Parliament on enhancing lottery proceedings and tackling challenges in the sector.
The proposals, addressed to Speaker of Parliament Alban Bagbin, highlighted the significant yet overlooked ways the government can optimize the use of lottery proceeds.
Mr. Awuku emphasized that his move aims to ensure the implementation of pragmatic and stricter measures against “illegal lottery operations, and maximize revenue through innovative fiscal strategies, including tax incentives.”
According to the Akuapem North Member of Parliament, the country generates over GHC300 million annually.
However, these profits, he indicated do not reflect national development due to expenditure limitations.
Meanwhile, he argues that, by taking his suggestions into account and implementing them effectively, the country would generate significant income from the gaming sector.
“Ghana will benefit immensely if we reform the management of lottery proceeds, strengthen regulations against illegal operations, and implement strategic incentives for the sector.
These measures will not only boost revenue but also ensure that the lottery proceeds serve their intended purpose—improving the lives of Ghanaians,” parts of the proposals available to this portal highlighted.
STATEMENT ON ENHANCING LOTTERY PROCEEDS ADDRESSING CHALLENGES IN GHANA’S LOTTERY SECTOR
By Samuel Awuku, MP, Akuapem North Constituency
Rt. Honourable Speaker,
Thank you for the opportunity to address this August house. As the immediate past Director General of the National Lottery Authority (NLA), I would like to bring to your attention the significant yet overlooked ways the government can optimize the use of lottery proceeds, implement stricter measures against illegal lottery operations, and maximize revenue through innovative fiscal strategies, including tax incentives.
UNDERRATED RELEVANCE OF NLA’S CONTRIBUTION
Rt. Honourable Speaker,
1. The National Lottery Authority was established by the National Lotto Act, 2006 (ACT 722), with the primary objective of conducting National Lotto to raise revenue for the nation and other purposes stated in the Act.
NLA generates significant revenue, amounting to over 300 million cedis annually. However, profits are expected to be funneled into the Consolidated Fund. This contribution is often lost in the country’s general expenditure, limiting the impact these funds may have had on targeted development.
Strategic Use of Lottery Proceeds
Rt. Honourable Speaker,
Please allow me to propose ways these funds can be utilized for the benefit of the state.
2. According to the World Lottery Association (WLA), “WLA member lotteries and sports betting operators contributed over USD 91 billion to fund good causes in the Fiscal Year 2023, and since 1999, member bodies have raised an estimated total of almost USD 1.7 trillion for the public good”. These contributions support education, health, environmental restoration, children with special needs and sports development.
The European Lotteries also indicate that “without National Lotteries, European society, culture and welfare would be €21 billion poorer”. Examples of contributions of member countries include “Spain’s National Association for The Blind (ONCE), which established a lottery in 1938. ONCE supports 71,000 jobs (57% are people with disabilities) and provides €230m annually in dedicated funding for social support for people with disabilities.
Greece’s OPAP has renovated 64% of the two largest Children’s Hospitals, investing 12 million euros and sharing smiles with 200,000 children. The project, launched in 2014, is still in progress.
Since its inception, Poland’s Totalizer Sportowy has spent more than €2.8 billion on sports development and sports infrastructure, while the Australian Lottery has contributed 2 billion Euros to sports in its 33-year history”.
History has it that the famous Great Wall of China, built to protect the Chinese States and empires from invasion by groups from the North, was primarily sponsored by lottery proceeds.
In California, USA, 95 cents from every dollar spent on the lottery goes to funding public elementary, middle, and high schools to support classroom services and educational programs.
The UK National Lottery contributed over £80 million (€88 million) to support more than 1,300 athletes in preparation for the Rio Olympics. The lottery also supports the NHS and health charities, including mental health programs.
In South Africa, a portion of lottery proceeds fund healthcare for underserved communities and support HIV/AIDS programs. At the same time, Ivory Coast has a project supported by its lottery body, LONACI, in every community.
In Ghana, under my tenure as Director-General of the NLA, we launched the Good Causes Foundation, which has, over the past four years, touched over 2 million lives by supporting individuals, institutions, and communities in the areas of Health, Education, Youth and Sports Development, and Arts and Culture.
Given the lottery’s essential contribution to society globally, I believe that if properly streamlined, we can do more with lottery proceeds in Ghana.
Therefore, I propose that the current National Lotto Act, 2006, (722) be amended with the guidance of the Ministry of Finance to allow lottery proceeds meant for the Consolidated Fund to be used to support specific projects in critical sectors like health, education, youth development and others as directed by this August House.
3. Funds can also be directed toward social interventions for persons with disabilities, elderly citizens, and marginalized communities to improve livelihoods or, perhaps, added to the District Assemblies Common Fund to assist Members of Parliament in developing their constituencies.
4. Mr. Speaker, it is essential to demystify the lottery by promoting it as not just a tool for entertainment but also a significant source of national revenue. We can generate more revenue by implementing transparent processes while educating the public on the social benefits of lottery proceeds. The European Lotteries encapsulates this principle in their motto: “A sustainable model for the benefit of society.”
Responsible Gaming – Protecting Minors and Fighting Addiction
Rt. Hon. Speaker,
5. I cannot discuss the operational challenges facing the NLA without addressing the issue of responsible gaming. Lottery, though a source of revenue for the government, can negatively impact the lives of people who become addicted to it, particularly minors who are most vulnerable.
6. I am advocating for the establishment of social centres across our communities to help both the young and old deal with their anxieties, addictions, and social problems. I also urge the NLA and its third-party collaborators to establish advisory bureau centres in their district and regional offices to assist players battling addiction in accordance with the standards of the WLA.
Illegal Lottery Operations
Rt. Hon. Speaker,
7. Illegal operations are arguably the bane of the lottery and gambling industry. In 2022, $1.8 trillion was lost to illicit operations globally.
8. Ghana is no exception. It is estimated that about 60% of Ghana’s lottery market is held by illegal lottery operators.
The proliferation of unlicensed operations denies the state millions of revenues annually.
Unfortunately, Section 4(2) of the National Lotto Act, 2006 (Act 722) limits an offender’s penalties to a fine of not more than two thousand and five hundred (2,500) penalty units or imprisonment for a term of not more than three (3) years or both.
The trend in sentencing illegal operators in Ghana has been the imposition of fines, which have not been deterrent enough because these illegal operators have deep pockets and can easily afford to pay the fines and return to their illegal operations.
I therefore urge this House to consider amending the current National Lotto Act, 2006 (Act 722) to impose stricter punishments, including higher fines and longer jail terms, to deter these illegal operators. Further, assets acquired through unlawful lottery activities should be forfeited to the NLA for operational activities.
9. According to an article from the Worldfolio, “Governments realize that if you try to block gaming, people are going to play or gamble anyway with the high probability that they will play within unregulated or illegal sites, where the player is not protected,”. “The argument is: if you want to control online gambling, even land-based gambling, you need to regulate it well and only then will you manage to control and protect consumers and prevent organized crime and money laundering.”
10. Online Gaming is Malta’s second-biggest contributor to GDP, with more than 12 percent of its annual income coming through online gaming services. I am confident that Ghana can make such gains if the illegal lottery space is appropriately controlled.
Tax Incentives
Rt. Hon. Speaker,
11. Many companies in Ghana receive tax incentives on terms that call for members of both sides of this house and the public to raise legitimate questions about these tax incentives.
12. I am calling for a clear-cut policy to stimulate tangible growth in the lottery industry through tax incentives.
13. These incentives will stimulate growth, improve efficiency in the lottery industry and encourage illegally operated companies to register with the NLA and take advantage of these benefits.
14. To an extent, this will help the NLA address the issue of illegal operators that have taken about 60% of the lottery market in Ghana. Additionally, these measures will encourage compliance and discourage underreporting taxes. Should the issue of illegal operators and inefficiency be resolved, the NLA could rake in revenues of over six hundred million Ghana cedis (GHS 600,000,000) annually.
Conclusion
Rt. Honourable Speaker,
Ghana will benefit immensely if we reform the management of lottery proceeds, strengthen regulations against illegal operations, and implement strategic incentives for the sector. These measures will not only boost revenue but also ensure that the lottery proceeds serve their intended purpose—improving the lives of Ghanaians.
Let us take this opportunity to enact the necessary reforms that will leave a lasting impact on our society.
Thank you, Rt. Honourable Speaker, thank you for the opportunity and your attention.
