Understanding the NLA-KGL Deal and Its Implications
Dr. Razak Kojo Opoku, former Public Relations Manager of the National Lottery Authority (NLA), has clarified that the provisional license granted to KGL in November 2019 had no connection to the debts accumulated by the NLA prior to this agreement. He emphasized that the NLA had been facing financial challenges long before KGL was issued its exclusive provisional license.
In a detailed statement, Dr. Opoku highlighted that the total debts of the NLA before the NLA-KGL deal amounted to approximately GHS 233,121,889.28 million. These debts were made up of several components, including:
- Unpaid Lotto Prizes to winners of the national lotto
- Unpaid Contractors
- Unpaid Withholding Tax (Income Tax) to the Ghana Revenue Authority (GRA)
- Unpaid Social Security and National Insurance Trust (SSNIT) Contributions
- Unpaid Technical Service Providers (TSP) Fees
- Unpaid Lotto Commission to Lotto Marketing Companies
- Unpaid Provident Fund
- Unpaid Staff Union and Association Dues Deductions
Challenges Faced by the NLA
According to Dr. Opoku, the NLA faced several operational challenges, including:
- A revenue sharing agreement with Technical Service Providers, where each received 6% on the gross revenue generated by the Authority via Point of Sale Terminals.
- A 2.25% commission to Lotto Marketing Companies for retailing lotto products via Kiosks and Point of Sale Terminals (previously it was 20%).
- Illegal lottery operations.
- Higher win ratios without capping on the amount of money used for staking lotto by the public.
He also refuted claims that the NLA-KGL deal was responsible for the NLA’s inability to transfer funds to the Consolidated Fund. According to him, this responsibility was a political and management decision unrelated to the NLA-KGL deal.
Legal and Financial Frameworks
Dr. Opoku explained that the duty of KGL is to pay its fees to the NLA in accordance with the terms and conditions of its license agreement. However, he emphasized that what the NLA does with the money paid by KGL is not the business of KGL, just as KGL cannot dictate how the Ghana Revenue Authority (GRA) uses the taxes paid by KGL to the state.
He further pointed out that Section 32(4) of the National Lotto Act, 2006 (Act 722) can only be fully implemented if Section 32(3) of the same act has been satisfied. According to Section 32(3):
“The Authority shall pay out of the Lotto Account prize monies for winners of National Lotto and commissions to Lotto Marketing Companies licensed by the Authority.”
Only after fulfilling this obligation can the NLA proceed with transferring the net balance in the Lotto Account to the Consolidated Fund on a monthly basis, as stated in Section 32(4).
Financial Discrepancies and Political Decisions
Dr. Opoku noted that there were instances where the NLA transferred money to the Consolidated Fund despite being indebted to various stakeholders. For example:
- In 2012, the NLA transferred GHS 20,000,000.00 to the Consolidated Fund while being indebted to winners of the national lotto, Lotto Marketing Companies, and Technical Service Providers at a cost of GHS 16,754,642.18.
- In 2013, the NLA transferred GHS 25,000,000.00 to the Consolidated Fund while being indebted to these stakeholders at a cost of GHS 56,917,633.63.
- In 2014, the NLA transferred GHS 11,850,000.00 to the Consolidated Fund while being indebted to these stakeholders at a cost of GHS 11,597,177.79.
This pattern continued through 2020, with the NLA transferring a total of GHS 209,409,495.24 to the Consolidated Fund over nine years, yet still being indebted to various stakeholders at a cost of GHS 233,121,889.28.
The Role of KGL in National Development
Dr. Opoku also highlighted the contributions of KGL to national development, stating that approximately 50-70% of KGL’s profits were invested into Corporate Social Responsibility (CSR) and Corporate Social Investments (CSI) across the country. These efforts included:
- Construction of a multimillion-dollar ultra-modern Mental Health Facility in Kumasi in collaboration with Otumfuo Osei Tutu II
- Providing a face-lift for Accra Psychiatric Hospital
- Support to Akropong School for the Blind
- Donations to flood victims at Keta
- Democracy Cup initiative by the Parliament of Ghana
- Sponsorship to the Ghana Football Association, Ghana Black Stars, and other national football teams
- Millennium Marathon
- Scholarships to orphans, neeedy, and destitute children
Other contributions included:
- Two million Ghana Cedis annually to support the NLA Good Causes Foundation
- Three million Ghana Cedis annually to support the NLA-KGL Stabilization Fund
- Refurbishment of the NLA’s Draw Studio and Brennan Hall
- Payments of Live Lotto Draws of the NLA
Conclusion
Dr. Opoku concluded by questioning why media outlets would blame KGL for the NLA’s inability to transfer funds to the Consolidated Fund, emphasizing that there was no factual basis for such claims. He also raised concerns about the NLA’s priorities, asking why they needed to transfer money to the Consolidated Fund if they had not been able to pay winners of the national lotto, commissions to Lotto Marketing Companies, fees to Technical Service Providers, and salaries and benefits to NLA workers.
