Acquire a License as a Nigerian Lottery Operator

A PROJECT
PROPOSAL TO
ACQUIRE A
LICENSE AS A
NIGERIAN
LOTTERY
OPERATOR
JUNE 2016 NATIONAL LOTTERY
REGULATORY
COMMISSION
ABUJA

EXECUTIVE SUMMARY
Our understanding is 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.

BACKGROUND
The National Lottery Regulatory 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

BACKGROUND
Another body also created 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.

BACKGROUND
Much more than is 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.

CURRENT CHALLENGES FACING
THE LOTTERY 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

Revenue £5.5
Billion GBP
Operating
income
£47.2
Million GBP
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

 Federal and state 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.
THE COMMUNITY

• California lottery dollars 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)
THE COMMUNITY

GLOBAL HIGHEST TOP WINNERS
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

GLOBAL LOWEST TOP
WINNERS
Prize(local
currency)
Lottery Country 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

CURRENT vs. POTENTIAL REVENUE
(billion naira)
0
200
400
600
800
1000
1200
Promo
Lottery
SMS Lottery POS Lottery Total
Current
Potential

OUR MISSION
‘’To increase annual 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.’’

REVENUE GROWTH FORECAST
(47% average annual growth rate in billions
naira)
0
200
400
600
800
1000
1200
2015 2018 2021 2025

OUR STRATEGY
A- supplying hardware, 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,

OUR STRATEGY
web
mobile TV Broadcast radio
billboards
Social media
Retail shops

OUR STRATEGY
Secure printing
application software
Lottery stand

TECHNOLOGY
 Marketing and partnering 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.

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

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

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.

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.

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.

V. Evidence and details 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).

XII. The Terms and 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
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.

POST SPORTS LOTTERY PERMIT 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.

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.

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.

POST SPORTS LOTTERY PERMIT 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).

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.

CONDITIONS
The SLO must:
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.

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

CONCLUSION
 There are rules 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.

Acquire a License as a Nigerian Lottery Operator

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