The lottery industry remains competitive, where localised lotteries are finding themselves competing with foreign games due to technological platforms. On-line gaming is providing more options for consumers, also threatening the revenue generated by traditional lottery operators. In view of the threats posed by the proliferation of illegal operators and online retailers the Board undertook to intensify regulatory compliance, which constitutes the largest component of the NLC mandate and underpins the NLC’s grant making function. The NLC commissioned and finalised the feasibility study to regulate illegal lotteries to explore innovative ways to combat illegal lotteries. While it is the function of the Board to maximise revenue for good causes, the NLC places greater emphasis on the protection of the public and National Lottery participants.

Since inception, the NLC has been inundated with numerous applications, which was a clear indication of the needs of the NGO/NPO/NPC sector. The amendment of the Lotteries Act and subsequent application afforded the NLC an opportunity to implement key changes and enhanced the manner which the NLC engages and services our stakeholders. The move to an open call system for applications from the previous system of time-bound calls that created high volume of applications during certain period and re-alignment of NLC internal processes resulted in the backlog of applications being eliminated and exceeding the 75% target for adjudication of applications within the prescribed 150 days.

The NLC recognises that it is an integral part of society and has adopted a stakeholder-inclusive approach in the execution of its governance and advisory role on the efficacy of the Lotteries Act, as amended. To this end, after considering the outcry from its beneficiaries and potential applicants on the legislative interpretation of regulations to the Lotteries Act, including the 12-month cooling-off period resulted in the NLC engaging the Minister of Trade and Industry on the implementation of clause 14 and other challenging clauses of the 2015 Regulations and ultimately the issuing of the widely publicised Legislative Interpretation of Various Provisions of the Lotteries Act 57 of 1997, as amended.

The NLC hosted its bi-annual Regulatory Round Table which was aimed at gaining insight into how the NLC regulatory activities can benefit both the man on the street and corporates that we regulate. The NLC also gained insights on regulation and its impact on the performance of regulated entities from an international perspective. The second NLC Indaba held in Ekurhuleni focused on funding requirements, funding for impact and the entrenchment of the new key priority areas for funding. The platform afforded the NLC an opportunity to evaluate the implementation of the 2015 Indaba Resolutions, identify gaps and challenges faced by Non-profit Organisations and develop new resolutions for implementation.

The NLC reduced its liabilities to an all-time low and disbursed R2.073 billion, withstanding a weakening economy and cannibalisation of the National Lottery territory by illegal lotteries.

The National Lottery reached its age of maturity with the celebration of 18 years in operation. The NLC has over the 18 years consistently ensured the National Lottery games are conducted with due propriety and that participants are protected. One of the key regulatory tools employed by the Board to ensuring that the Board fulfils its obligations of the protection participants, prize monies and sums for distribution is the regulation and oversight function exercised over the National Lotteries Participants Trust.

Post year-end reporting events have seen the Board being required to exercise full control over the activities of the National Lotteries Participants Trust by the Executive Authority and the Auditor-General of South Africa’s expectation to consolidate the Trust. Consolidation of the Trust cannot happen in the absence harmonisation of provisions in the Lotteries Act, Licence Agreement and the National Lotteries Participant Trust Deed of Trust. The Board of the NLC will commence engagements with the Executive Authority to ensure that the recent expectations of our key stakeholders are addressed in the ensuing financial period and going forward.

I wish to thank the leadership and staff of the National Lotteries Commission and the Commissioner for striving for performance excellence and continued commitment to being Catalysts for Social Upliftment, the Minister and the dti for the consistent support given throughout the year and the NLC Board for steering the NLC towards becoming the beacon of corporate governance excellence. The NLC is committed to clean governance and ensures that the Commission performs its functions efficiently and effectively in compliance with this Act, any other applicable law and corporate governance best practice.

Prof NA Nevhutanda
Chairperson of the Board

National Lotteries Commission