Business News of Wednesday, 18 February 2015
Source: Graphic Online
The illegal private lotto operations, popularly referred to as ‘banker to banker,’ which were banned by the government in 2006, are still booming in some parts of Accra.
The government banned their operations when it was noticed that their activities were not contributing to national revenue in any way.
The National Lottery Authority (NLA) Act 722 was, therefore, promulgated to fully vest the power to regulate, supervise, conduct and manage national lotto and other related businesses in Ghana to the Authority.
But nine years on, it appears the ‘banker to banker’ operators have disregarded the government ban on their activities and are beginning to once again, dominate the market.
Interestingly, some of the licensed Lotto Marketing Companies (LMCs) also engage in the “banker to banker” activities as it appears to be the choice of many lotto ‘stakers’.
GRAPHIC BUSINESS checks around some popular lotto joints near the Kwame Nkrumah Circle confirmed their activities.
However, they were very cautious of those who patronised their illegal business for fear of being caught.
Most of the illegal operators declined to grant us interviews about their business, because they were suspicious of being exposed to the NLA which they suspect was gathering intelligence on the ground.
Fortunately, an operator who has been operating illegally for four years, spoke to the paper on condition of anonymity explaining that the legal business used to be very viable but sales had dropped in recent times.
“About 20 people used to stake lotto a day and I get between GH¢300 to ¢400 a week, but now just 14 people. Even as I am speaking to you now, it is just one person that has come to stake lotto and it is 1p.m. already,” he said in an interview on January 27.
According to him, the operations of the ‘banker to banker’ were not different from the LMCs, except that they (banker to banker) worked their figures manually while the LMCs used machines provided them by the NLA.
“The only difference is that when people win, they go to our agents and they pay them. Our commission is 20 per cent of the winning amount. The government operators go to the NLA for their money,” he added.
When asked whether he paid taxes, he nodded in the affirmative after a bit of hesitation, explaining that they paid taxes every year.
From his response, it was clear the illegal operators did not contribute to government’s revenue in any form because of the nature of their activities.
Indeed, the NLA is aware of the continued threat that the ‘banker to banker’ operations pose to the NLA.
A statement issued by the company said the authority recognised that the most effective way to deal with the ‘banker to banker’ phenomenon was to deploy new and effective marketing strategies, including paying wins promptly.
Mr Charles Nkrumah has 15 years of experience in the lotto business. He owns two vending machines from the NLA and told the GRAPHIC BUSINESS that he had adopted his own marketing strategy to enable him to make more revenue.
The NLA, he said, gave them 18 per cent commission based on the revenue they generated, and in order to attract more people, he gave his clients 10 per cent discount on purchases.
He said to acquire the machine, the operator must register his company and he or she would be given training on how to use it after paying a fee of GH¢250.
He said the machine was fed by the NLA every week and winners were supposed to go to the NLA for their monies when they win.
According to him, the percentage given to them by the NLA as their commission was very small and called for review.
The point also needs to be made that the lotto business is still good as available figures show that the NLA’s contribution to the Consolidated Fund for the past three years has beeen encouraging.
For instance in 2012, NLA’s contribution to the Consolidated Fund was GH¢20 million. It subsequently increased to GH¢25 million in 2013 and then to GH¢30 million in 2014.
With over 8,000 licensed Lotto Marketing Companies (LMCs) by the NLA all over the country, lottery remains a viable business for most people as well as a source of winning money for its patrons.
These LMCs are paid monthly commission based on the revenue they are able to generate for the NLA.
Mr Nkrumah was of the opinion that instead of the swoops and arrest of these ‘banker-to-banker’ people, they should rather be allowed to operate so that they can be taxed.
“People like the ‘banker to banker’, so government should recognise them and tax them. This is because they will not stop operating and even some people with the machines are still doing the ‘banker to banker’,” he explained.
He said the banker to banker did not differ from theirs as they also relied on the numbers drawn by the NLA to declare their winners.