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Acquire a License as a Nigerian Lottery Operator
Our organization is proposing to acquire a license to operate as a Nigerian lottery operator. This would allow us to significantly increase annual lottery revenues through innovative technology and public outreach. Our strategy involves supplying hardware, software, and systems integration while bringing experience in marketing, technology, and partnerships. We forecast lottery revenues could grow from N356 billion in 2015 to over N1 trillion by 2025 through our strategy. Acquiring a sports lottery permit would allow us to operate sports-based lottery games and significantly contribute to government and community funds.
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Acquire a License as a Nigerian Lottery Operator
- 1. A PROJECT PROPOSAL TO ACQUIREA LICENSE AS A NIGERIAN LOTTERY OPERATOR JUNE 2016 NATIONAL LOTTERY REGULATORY COMMISSION ABUJA
- 2. EXECUTIVE SUMMARY Our understandingis that there exists a fundamental disparity in the areas of revenue generation, integrity and transparency within the Nigerian lottery industry. Our extensive research within the industry shows evidence that the National Lottery Regulatory Commission (NLRC) should be earning more as well as Lottery operators, corner shop retailers and the local communities at large. Our survey results has uncovered that the industry currently has an annual revenue potential of N1.1trillion which is a far fetch from the estimated N350 billion for the year 2015. This leaves out an enormous N784 billion in un-amassed earnings and an estimated N157 billion deficit for the National Lottery Regulatory Commission.
- 3. BACKGROUND The National LotteryRegulatory Commission (NLRC) was established through the National Lottery Act of 2005. The Commission was primarily born out of the need to regulate the operations of lottery business, promote transparency and accountability in lottery; and protect the interests of players, stockholders and the general public. NLRC provides licenses and permits to those who want to play lottery because to play the lottery, permission is required. NLRC also ensures the protection of investors and stakeholders including the government
- 4. BACKGROUND Another body alsocreated by the Lottery Act of 2005 is the National Lottery Trust Funds, which is part of the proceeds that come from lottery. There are rules that guide the performance of lottery; one of them is that a minimum of 50 percent of any lottery proceeds must be kept aside as price, while 20 percent must come to the trust fund so that, at the end, you find out that 70 percent of the proceeds from lottery goes back to the people.
- 5. BACKGROUND Much more thanis anticipated can happen when there is integrity and transparency, which is one of the things that the Lottery Commission must ensure in the business. When the general public play, they play because they know that there is integrity and transparency. Also they play because they know that part of the money is going towards charity. It will provide scholarship and support for sportsmen and women. In other words, they know that lottery has been used all over the world to support good causes.
- 6. CURRENT CHALLENGES FACING THELOTTERY SECTOR IN NIGERIA Lack of transparency within Lottery operators Little or no sensitization of the public on the existence of the National Lottery and its benefits especially in regards to economic development, charity and community projects. Poor publicity for Lottery winners Insufficient technology infrastructure to keep on track on lottery ticket sales by Lottery operators
- 7. Revenue £5.5 Billion GBP Operating income £47.2 MillionGBP Net income £32.4 Million GBP Number of employees 750 • In the 1960s casinos and lotteries began to re-appear throughout the world as a means for governments to raise revenue without raising taxes. •Lotteries, like any form of gambling, are susceptible to fraud, despite the high degree of scrutiny claimed by the organizers. Numerous lottery scams exist. Some advance fee fraud scams on the Internet are based on lotteries. The fraud starts with spam congratulating the recipient on their recent lottery win. POSSBILITIES OF LOTTERY TO THE COMMUNITY
- 8. Federal andstate income taxes are imposed on the winner. Last year, ticket sales in New Jersey topped $2.7 billion, putting a staggering $950 million in state coffers. (New Jersey, USA) . Lottery dollars paid for 8.3 million meals served at senior centers and delivered to seniors’ homes. 22,700 hot meals for older residents Helped to provide more than 26,600 prescriptions to older city residents. POSSBILITIES OF LOTTERY TO THE COMMUNITY
- 9. • California lotterydollars are used to supplement funding to public education on all levels from kindergarten through higher education. • Georgia uses proceeds to fund specific education programs including tuition grants, scholarships or loans at eligible Georgia colleges, universities, or technical colleges via a HOPE scholarship; pre- kindergarten programs; and capital outlay projects including computer and other technological upgrades for schools, technical institutes, colleges and universities. (1.6 million students have been able to attend colleges through Georgia’s HOPE scholarship program and more than 1.3 million four-year-olds have attended pre-kindergarten) POSSBILITIES OF LOTTERY TO THE COMMUNITY
- 10. GLOBAL HIGHEST TOPWINNERS Prize(local currency) Lottery Country Winner Date Notes $590.5m Powerball United States One ticket from Florida 18 May 2013 Largest sole winner, 84 year old Gloria C. MacKenzie, collect lump sum of $371m $390m Mega Million s United States One ticket each from New Jersey and Georgia 6 March 2007 World's largest annuitized jac kpot $380m Mega Million s United States One ticket each from Idaho and Washington 4 January 2011 $365m Powerball United States One ticket bought by eight co-workers from a Nebraska meat-processing plant 18 February 2006 World's biggest prize from one ticket
- 11. GLOBAL LOWEST TOP WINNERS Prize(local currency) LotteryCountry Winner Date Notes €37.6m National Lottery Germany Won by a nurse from North Rhine- Westphalia 7 October 2006 Largest German prize and single winner ₱741.1m Grand Lotto 6/55 Philippines One ticket holder from Olongapo City 29 November 2010 Asia's largest prize (€13m) R$145m Mega-Sena Brazil Won by one ticket holder from Brasília(Fed eral District) and one from Santa Rita do Passa Quatro (São Paulo) 31 December 2009 South America's largest prize A$112m OZ lotto Australia Four winning tickets 6 November 2012 Australia's highest lottery prize
- 12. CURRENT vs. POTENTIALREVENUE (billion naira) 0 200 400 600 800 1000 1200 Promo Lottery SMS Lottery POS Lottery Total Current Potential
- 13. OUR MISSION ‘’To increaseannual lottery revenues from N356 billion* (2015) to N650 billion (2018), N835 billion (2021) and N1.1 trillion (2025) consecutively through innovative technology and sensitization of the Nigerian public.’’
- 14. REVENUE GROWTH FORECAST (47%average annual growth rate in billions naira) 0 200 400 600 800 1000 1200 2015 2018 2021 2025
- 15. OUR STRATEGY A- supplyinghardware, software, and systems integration expertise B - with responsibility for the communications network C- bringing experience in consumer marketing and knowledge of the world of corner-shop retailers. D - knowledge of secure printing technology E - selected supplier of applications software. F - develop media campaigns via TV, radio, social media, billboards,
- 16. OUR STRATEGY web mobile TVBroadcast radio billboards Social media Retail shops
- 17. OUR STRATEGY Secure printing applicationsoftware Lottery stand
- 18. TECHNOLOGY Marketing andpartnering skills should be matched by expertise in project management and technological knowhow. IT infrastructure is a critical component in this industry. As part of its commitment, any interested organisation will roll out a network of new terminals, media screens and satellite dishes across its retailers – the largest, and fastest, lottery upgrade of its kind in Africa. This will be followed by a rollout of 8,000 new full terminals and then 10,000 standalone Scratch card terminals with independent outlets making up the majority. In retail, any interested organization should adopt ground-breaking Fast Pay’s service. It enables players to store their game preferences on a re-usable card and play draw-based games at the checkout. Any interested organisation will lead the field of digital lottery innovation and e-commerce, operating Africa’s largest online lottery in terms of sales. We will launch a major new online and mobile platform, which will transform the way players interact with the National Lottery games across all devices – especially on mobiles where, for the very first time, players are now able to play Instant Win Games. In addition, we introduced a first ever mobile payment option. Providing smart phone users with a great ‘quick pay and play’ experience, it offers players even greater access and convenience, and enhances The National Lottery’s existing online payment options.
- 19. BENEFITS OF OUR STRATEGY Fundraising for Security Trust Fund and Development Fund with FCDA Improved revenue regeneration Sensitization of the general public on the existence, community benefits and how-to-play on National Lottery Partnership with Mobile Subscriber companies (GSM) Collaboration between Lottery operators for transparency and integrity Reduction of fraud and fake ticketing in lottery operations
- 20. EVERY N100 50%→ Prize Fund 20% → Good Causes 20% → Government 5% → Retailers as Commission 5% → Lottery Company 4.5% → Lottery Company for Operating Costs 0.5% → Lottery Company for Profit
- 21. NIGERIAN SPORTS LOTTERY PERMIT(SLP) REQUIREMENTS The National Lottery Regulatory Commission shall issue a five (5) year Sports Lottery Permit (SLP) to a fit and proper body corporate with the objective of operating a lottery business based on the outcome of sporting events. The Permit shall be subject to the following terms and conditions. All prospective Sports Lottery Operators (SLO) must submit a formal enquiry letter to which the NLRC will forward these Terms & Conditions forthwith. The NLRC will conduct a due diligence exercise to ensure all information provided is complete and accurate before issuing a letter of approval.
- 22. NIGERIAN SPORTS LOTTERY PERMIT(SLP) REQUIREMENTS The Applicant (SLO) must: 1. Submit a written application to the NLRC requesting an “approval-in- principle” to register a sports lottery business in Nigeria. Such application should be accompanied with the following: A TEN THOUSAND NAIRA (N10,000) non-refundable bank draft payable to the National Lottery Regulatory Commission. A copy of the proof of the “name reservation” from the Corporate Affairs Commission (CAC). 2) Register Company with a minimum share capital of THIRTY MILLION NAIRA (N30,000,000) with its core objectives as the operation of sports lottery in Nigeria.
- 23. NIGERIAN SPORTS LOTTERY PERMIT(SLP)REQUIREMENTS 3) Upon completion of registration with CAC, submit a written application for a licence accompanied with the following: I. A non-refundable application and processing fee of TWO MILLION NAIRA (N2,000,000) in bank draft made payable to the NLRC. II. Proof of Registration (CAC certificate of incorporation) 4) Complete and return permit application form with the following: I. Memorandum and Articles of Association II. Clearance letter from the Economic and Financial Crimes Commission (EFCC) and the Nigerian Police Force. III. Bank guarantee from a reputable Commercial Bank, stating that “at all times you will meet up to the obligation of prize redemption request from winners on your platform to the tune of TWO HUNDRED MILLION NAIRA (N200,000,000). IV. Evidence and details of source of funds.
- 24. V. Evidence anddetails of source of funds. VI. Bank authorisations to grant NLRC access to all business transactions. VII. Business Plan detailing but not limited to the following (marketing plan, lottery industry analysis of the tyres of games to be played, price structure of tickets, number of draws, applicant’s game rules, capital budget and financial plan). VIII. Address of Registered Office, Branches, Planned locations and Agents. IX. Description of Operations and Management Structure. X. All third party Agreements/Contractors to be reviewed, which may be approved or rejected by the NLRC (SLA agreements, Software agreements, Join venture Agreements). NIGERIAN SPORTS LOTTERY PERMIT (SLP) REQUIREMENTS
- 25. XII. The Termsand Conditions for participation in all games. XIII. A 3-year Tax Clearance Certificate of all directors. XIV. All schemes/games/activities to the NLRC for test run before launch. XV. Software Certification – National Office for Technology Acquisition and Promotion (NOTAP) (if applicable) 5. Proof of Registration of trademarks and domain names with Nigerian Internet Registration Association. 6. Provide qualification information of key staff (ICT MANAGER, ACCOUNT MANAGER, HUMAN RESOURCES MANAGER, CUSTOMER CARE MANAGER) 7. Pay the Sports Lottery Permit fee of ONE HUNDRED MILLION NAIRA (N100,000,000), within 30-days of receipt of notification by the NLRC. NIGERIAN SPORTS LOTTERY PERMIT (SLP) REQUIREMENTS
- 26. NIGERIAN SPORTS LOTTERYPERMIT (SLP) REQUIREMENTS 8) Sign the Sports Lottery agreement to abide by the rules and regulations governing Sports Lottery operation in Nigeria. 9) All existing license who wish to obtain a Sports Lottery permit must in addition to requirements 3 to 6 above, also: I. Submit bank statements of the 2 years. II. Submit evidence of increase of share capital to N30,000,000. III. Submit evidence of up-to-date annual returns.
- 27. POST SPORTS LOTTERYPERMIT TERMS & CONDITIONS The SLO must: 1. Ensure participation age is 18 years and above. 2. Provide: A SLO website URL and advert material(s) in hard and soft copy for upload to the commission website. Ensure the Commissions’ URL is present on SLOs’ website 3. Submit to the NLRC central server: 4. Daily Data detailing total entries, wins, losses and pay-out(s). Where the applicant has an external technical consultant managing the operation/transaction, the consultant must be authorised to submit daily data.
- 28. POST SPORTS LOTTERYPERMIT TERMS & CONDITIONS The SLO must: 1. Ensure participation age is 18 years and above. 2. Provide: A SLO website URL and advert material(s) in hard and soft copy for upload to the commission website. Ensure the Commissions’ URL is present on SLOs’ website 3. Submit to the NLRC central server: Daily Data detailing total entries, wins, losses and pay-out(s). Where the applicant has an external technical consultant managing the operation/transaction, the consultant must be authorised to submit daily data. In the event of a manual process, the daily scheme activity reports must be submitted to the NLRC.
- 29. POST SPORTS LOTTERYPERMIT TERMS & CONDITIONSThe SLO must: 4. Pay a sports permit annual subscription fee of N2,000,000 5. Pay an operating fee of 4.5% of monthly proceeds to the NLRC. 6. Remit 20% of quarterly proceeds to National Lottery Fund for good causes. 7. Ensure to meet all obligations to players on your platform, 8. Submit evidence of monthly operating fee remittance/Submit evidence of remittance of 20% of proceeds to National lottery trust Funds for good causes. 9. Submit evidence of remittance of 20% of proceeds to National Lottery Trust Fund. 10. Submit an Annual Audited Financial Report.
- 30. POST SPORTS LOTTERYPERMIT TERMS & CONDITIONS The SLO must: 4. Submit an Annual report not later than 6 months after the end of each reporting year, the SLP will be suspended if this annual report is not submitted by the stipulated period. 5. If new agreement are entered under the period under review. All third party Agreements/Contracts to be reviewed, which may be approved or rejected by the NLRC (SLA agreements, software agreements, joint venture agreements) 6. Ensure that the Sports Lottery Permit (SLP) shall not be used to commit fraud or support any criminal act. 7. SLO must always revert to the Commission before entering into any form of Agency/Franchise agreement(s).
- 31. POST SPORTS LOTTERYPERMIT TERMS & CONDITIONS The SLO must: 4. Submit an Annual report not later than 6 months after the end of each reporting year, the SLP will be suspended if this annual report is not submitted by the stipulated period. 5. If new agreement are entered under the period under review. All third party Agreements/Contracts to be reviewed, which may be approved or rejected by the NLRC (SLA agreements, software agreements, joint venture agreements) 6. Ensure that the Sports Lottery Permit (SLP) shall not be used to commit fraud or support any criminal act. 7. SLO must always revert to the Commission before entering into any form of Agency/Franchise agreement(s).
- 32. POST SPORTS LOTTERYPERMIT TERMS & CONDITIONS The SLO must: 4. SLO must always revert to the Commission before entering into any form of Agency/Franchise agreement(s). 5. SLO must ensure office location is a minimum of 400 metres away from the office an existing SLO. 6. To ensure the interest of the stakeholders and participants are protected, the NLRC review and duly approve any franchise agreement before it is implemented.
- 33. KEY PERFORMANCE INDICATORS Available information on website for successful projects initiated by lottery fund including education (scholarships) and sponsorship, infrastructure development etc. Increased sale of tickets Transparency and Accountability (E-lottery) Partnership with GS First time players Legitimately compensated winners
- 34. CONCLUSION There arerules that guide the performance of lottery and our company aims to maximize the earning potential of these already existing rules. We also aim to sensitize the general public play on the possibilities of playing the lottery and provide assurance of integrity and transparency and donations to charity. Through innovative technology and media strategy our vision is to improve the National Lottery revenue by an average of 47% yoy until 2025.
- 35.