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Moody's gives SA a vote of confidenc... Unions heading for record year of stri... Bank likely to err on side of cautio... Lottery to scratch out the card... |
Lottery to scratch out the cards
Scratch-card companies are scrambling for a share of the new charity game, writes SHERILEE BRIDGE
SA's scratch-card industry, currently turning over R300-million a year, will be replaced by the country's newest industry, with a projected turnover of between R2- and R10-billion. Department of Trade and Industry director of gambling, lotteries and liquor, Ajay Sooklal, says closure of the existing operations will ensure the National Lottery gets all the business it can to "give more back to SA". The scratch-card industry has to date injected R2-billion into charities. Michelle Venter, operations director of the Ithuba Trust, says the industry knew it would have to shut down when the lottery was introduced. Games Africa, the industry's chief operator feeding SA's four scratch-card companies (Ithuba, Viva, Community Chest and Natal Lotto), is bidding as part of a consortium for the coveted government contract to operate the National Lottery. Meanwhile, the scratch-card companies are scrambling for alternative means to fund their organisations. "Most companies are expected to lobby for the distribution agency to handle the funds flowing from the lottery," says Venter. "Others have set up investment arms as a ballast should they not find a home as part of the new industry." Jacques Verster, MD of Spearhead, a lobbying public and corporate affairs group, says there is a worldwide debate surrounding national lotteries and whether to allow private sector participation. He says private sector competition is unlikely to be given the nod, but legislation could allow for society lotteries, in which case fund-raising organisations would be able to run their own scratch-card competitions with a maximum prize of R1-million. The awarding of the licence to operate the National Lottery is "like a licence to print money", he says. According to the DTI, the successful bidder will have between three and six months to set up a scratch-card operation, and six months to establish an online lottery. Winning the licence would also mean the operator has to invest up to R1-billion over the next five to seven years to build up a sophisticated national network that would reach more than 25-million adults. Six consortia are expected to bid for the licence: Moraba led by Moribo Leisure; Hosken Consolidated Investment-led consortium Lottoyethu; Rainbow Entertainment with international group GTech; Virgin of the UK; Pan Malaysian Pool Management; and International Growth Company. Half of the revenues raised through the lottery will go to prize-money, 30% to "good causes" and 20% will cover the expenses of running the lottery. Sooklal says a chairman of National Lotteries Board has been appointed and the board is expected to be in place soon. The tender document will be out in October and close in November. The licence is expected to be awarded by April next year, at the same time the scratch-card industry is hoping to hear who has won the distribution agency.
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