Princewill Ekwujuru
29 December 2008
interview
Over the years, Nigerians have believed that lottery is gambling, but in an encounter with the Managing Director of National Sports Lottery (NSL) Plc, Dr. Odulami Kola- Daisi, he explains the benefits of lottery to Nigerians and the challenges that it may face as a result of epileptic power supply. Excerpts.
When was National Sports Lottery (NSL) Plc NSL was registered on 3rd January 2000 as National Sports Lottery Limited, but later converted to a Public Liability Company (PLC) on 9th July, 2007. It was quoted on the Nigerian Stock Exchange (NSE) on 14th December, 2007.
Is NSL a private or government initiative?
The concept of a National Lottery was first discussed in government in 1999 and was subsequently determined to be more suited to private funding and operation than government. As a result, NSL was formed and licensed to be the operator.
Who are the Directors of NSL?
The operating company is owned and funded by a combination of local and institutional shareholders who share the vision of harnessing the power of lotteries to generate funds for community good causes. The Directors include Chief Kola-Diasi (Chairman), Chief J A O Olopade, Chief Emmanuel Iwuanyanwu, Brigadier General S. Teidi, Chief Mazen Aboumata, Chief Alex Duduyemi, Chief Rasheed Gbadamosi, Otunba Deji Osibogun, Dr. Odunlami Kola Daisi, Mr. Tunde Ayeni, Alhaji Shehu Badamosi, Dr. Muyiwa Oladimeji, Mr. Colins Chikeluba, Mr. Akin Areola, Dr. Victor Alaojin and Mr jide Oluwasanmi.
Who are the foreign partners in NSL?
NSL had been privileged to have had reputable international partners such as the combination of Tattersall's of Australia and Essnet of Sweden in a partnership called TATTSNET. Recently, it entered into Agreements with Valucard, the sole representatives of VISA International in Nigeria for payment platform for the electronic payments aspect of the company and INGENICO of France for the supply and maintenance of Point of Sale (POS) terminals. Others are ARIUS of Belgrade for software development and maintenance and other local partners, including Gideon Trust Micro-Finance Bank for the empowerment of our Agents.
What is the shareholding structure of the company?
Ownership of NSL has been expanded to include all Nigerians through an Initial Public Offering of its shares in a just concluded exercise. The allotment is being concluded and in due course the structure will be released by the company. Shares were offered on equal basis to all the states of the federation thereby making NSL a truly Nigerian company owned by Nigerians.
What is the duration of NSL's license?
The licence was issued to NSL for a period of thirty years. However, the act has divided this into 2 terms of 15 years each. The licence is supported by a prior Agreement signed between Federal Government and NSL 1999. That licence has further been accorded recognition and legitimacy subsequently by an Act of the National Assembly.
How was NSL's license secured?
As part of the recommendations of VISION 2010, funding of sports development was raised with the President in 1998, and various proposals were considered including the establishment of a National Lottery. Discussion in the Federal Cabinet led to Government support for a lottery initiative where the net proceeds were to be used for sports development and community good causes. Various eminent Nigerians were approached to consider establishing and funding an entity to be licensed to operate such a lottery, and the Cabinet approved the issuing of a Licence to NSL Ltd by the Finance Minister in December 2001.
Is there any legislation to provide for a National Lottery licence?
When the licence was issued by the Minister of Finance under the direction of the President, and after discussion in the Federal Cabinet, legislation was not considered necessary. Subsequently the Government recognised the need for the lottery to be properly regulated and for the proceeds to be committed to sports development and community good causes, hence, an enabling LAW, the NATIONAL LOTTERY ACT 2005 was promulgated by the National Assembly. The LAW was assented to by the President, Commander-In-Chief of the Armed Forces on 30th March, 2005.
Lottery licences are often issued for 7-10 years in other countries; how come 30 years in Nigeria?
In most other countries, the Government itself funds and operates their National Lottery. The challenges of establishing and operating a lottery are much greater in Nigeria than in other countries -power, communications, retail infrastructure - are all not-well developed, and hence the costs are considerable. For a private organisation to take on these investment risks, the Government needs to ensure that the licence term is long enough to ensure that the business is viable. In this case, given the investment required, it is unlikely that NSL will begin generating profits for several years, despite an investment in the neighbourhood of about 10 Billion Naira.
Is Lotto Nigeria an offshoot of National Sports Lottery (NSL)?
Lotto Nigeria is the registered trade mark and brand name for the games of the National Lottery.
What assurance dose NSL have that lotteries will be successful in Nigeria?
Nigeria is not different from other nations where lotteries have been successful. In Africa, there are success stories from Ghana, Morocco and South Africa. A system that guarantees transparency and prompt payment of prizes will find quick acceptance among Nigerians. This combined with skilled personnel and modern infrastructures, as has already been put in place by NSL, are ingredients of a successful lottery.
Is there any co-operation between NSL and any bank or consortium of banks? What kind?
NSL has a couple of partner banks for handling retailer deposits and providing facilities to pay Lotto Nigeria prizes to winners and will have an opportunity to sell tickets.
What is an online lottery?
Online lotteries have been around since the mid-1970's, and today over 100 countries or states have them. The term "online" is nothing to do with the Internet. It refers to the dedicated and encrypted data line which connects each terminal to the central computer system, and ensures complete integrity and reliability of data collection and processing. This means that tickets cannot be printed until the central computer has recorded the player's selected numbers.
Won't epileptic electricity supply by the Power Holding Company of Nigeria (PHCN) be a major challenge to playing the lottery?
The brand of Point-of-sales (POS) terminals being deployed by NSL is mobile, rugged and robust. It comes with in-built batteries that can last several hours depending on the volume of transactions. In addition, NSL is providing mobile battery chargers that can keep the batteries running for several days. With these devices in place, players will be able to buy tickets at all times.
How many outlets will be available for players?
At present, NSL has commenced deploying its high end 18550 POS terminals to State Capitals and other commercial active towns nationwide. In the first phase which will completed in November 2008, 20,000 point of sales will be available nationwide.
Can your agents/retailers be trusted?
NSL/Lotto Nigeria retailers must undergo checks on their background and must provide trade references before they are able to sign a contract with NSL. They must undergo an initial full day's training before they are allowed to sell tickets and pay prizes, and will undertake further training on a regular basis. All retailers will be visited regularly by NSL's sales staff that will monitor their sales performance. At any time NSL can terminate the contract if the retailer is not conducting the business according to the requirements of his contract.
Aren't you encouraging gambling in itself or by other means?
In most countries of the world, lotteries are supported and operated by Governments because they are not considered to be gambling, and extensive research has proved that lotteries are beneficial to the community. Gambling is considered to be activities such as horse race betting and playing in casinos, where the rapid pace of the games can cause people to overspend. Research shows that most players in Nigeria will only spend between N50 and N200 on lotto Nigeria, and then have to wait until the Saturday night live draw on television to see if they have won a prize
What volume of business is projected?
NSL has deliberately priced entries in Lotto Nigeria games at N50 each to ensure it is affordable to all levels of society. This means that large numbers of people will play in all the towns and cities, and we estimate that weekly sales in excess of N200 million will be reached in a few months when the business is mature.
What volume of employment will NSL generate, especially within the first year of its take off?
NSL has directly employed over 100 people and this number will grow minimally within six months. The retailers across the country will employ additional full and part time staff. So overall we are confident that at least 20,000 additional full time jobs will be created over time.
As the retailer network increases across the country, further job creation will occur.
What will be the value of contracts let by NSL to Nigerian companies?
NSL has a policy of supporting Nigerian suppliers wherever possible, but the full value of these contracts cannot be estimated accurately at present.
Is the company still recruiting or has it concluded its recruitment exercise?
The company has almost completed its recruitment exercise.
What about security of personnel and cash, since there will be high movement of cash?
NSL has over the years acquired extensive experience in implementing the security infrastructure necessary to protect lottery facilities, and providing guidelines to retailers, as well as ensuring that players' prize funds are always secure. In Nigeria, the various lottery buildings will be protected inside and out by the latest electronic and physical security measures, equipment, and procedures. Secure cash handling and prize payout procedures have been developed jointly with partner banks. More so, NSL has devised an electronic transaction system that limits the amount of cash handling in both its operations and those of its agents/retailers.
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