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Upliftment lottery faces legislative axe
The new Lotteries Act could spell the end for
Lotto KZN, which has been delivering much-needed services in the province, writes MARCIA KLEIN
Lotto chairman Roland Starkey says the Act, published in November, identifies three types of lotteries - national, private and society. Private lotteries are restricted to members of a club. Society lotteries are geographically constrained, and must not be for gain. But there is a restriction on the level of the prize to R1-million a year. Lotto comfortably fits the first two requirements, but it expects to have issued R90-million in prizes in the year to March 1998. Starkey says a clause in the White Paper enabled society lotteries to make a submission to the Lottery Board to increase the prize money distribution, but in the process of various hearings and submissions, this discretion disappeared from the final version of the Act. This means that while Lotto will be able to continue to operate in the new dispensation, the limit on prize-money is way below what it pays out. Recently, for example, the prize, which includes various carryovers, was R6.8-million and was won by three parties. A new prize in the order of R800 000 to R900 000 was already up for grabs by the following week. Lotto was started in 1992 by the Operation Jump Start Association, a section 21 company. Starkey says the lottery was initiated when it was clear there were no available government funds to help build schools, creches and adult education centres. Lotto, an on-line lottery which is operated through 350 outlets, has R200-million in turnover and will redistribute R85-million (1997: R42-million) this year, most of which goes directly into building educational facilities (some goes to charity). Since it started operating in 1992, Lotto has given away R100-million to community upliftment projects, more than the provincial capex and RDP budgets for KwaZulu-Natal. It has funded over 2 300 classrooms, which house 120 000 children, built 137 creches, 100 community halls, as well as water tanks, toilets, training centres and playing fields. It spends less than 1% of gross revenue on administration, 8% on marketing and commissions, 50% in prizes and 41% on upliftment projects. Starkey says Lotto has made submissions to various commissions, "who have been sympathetic to our structure". However, he feels the people who pass the Act may not be aware to what extent the delivery of services in KwaZulu-Natal is a direct result of Lotto's efforts. He says a centrally driven fund will not be as effective in distributing services to local communities or in facilitating employment. Policymakers may not be aware of the fact that Lotto has proved to be a rapid delivery mechanism. "First prize for us would be to be left alone. If we are allowed to compete with the national lottery, we would be able to survive, although we would expect to lose a considerable amount of turnover, in the order of 25% to 30%. The second prize would be to have a stay of execution. In four years we could basically wipe out the shortage of schools in KwaZulu-Natal - another 12 000 classrooms are still required," says Starkey.
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