A company or corporate entity having business objects that have nothing to do with lottery services, but organises a promotional scheme that has an element of chance or lot in the distribution of prizes is required to apply for what is known as a promotional lottery permit prior to the launch of such a promotion.
The requirements needed to procure this type of regulatory permit is what constitutes the focus of this article.
Which regulatory agency is in charge of granting nationwide permits for promotional lotteries in Nigeria?
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National Promotional lottery or Consumer Sales Promotion permits are under the jurisdiction of the National Lottery Regulatory Commission (NLRC).
What are the requirements needed for the grant of a promotional lottery permit in Nigeria?
– Applicants must submit a detailed modality of promotion to the NLRC with the following :-
a). An application letter stating the intention of the applicant
b). A Completed NLRC application form
c). A non-refundable processing fee as determined by the NLRC based in relation to the volume of the proposed scheme and payable to the NLRC.
d). Incorporation documents :- A certificate of incorporation, a memorandum and articles of association (MEMART), and particulars of directors and shareholders.
e). Details of the administrative office of the applicant.
f). Nature of product/service being promoted.
g). Details of key personnel in charge of the promotion.
h). Detailed modalities of the promotional lottery including the name of the scheme, the total value of the prizes and categories of prizes to be won, mode and criteria or selection, draw process and applicable rules.
i). Duration of promotional lottery and frequency of draws/selection of winners and proposed draw dates m
j). Rules/Terms and Conditions of eligibility, qualification and participation in the promotional lottery.
It should be noted that an applicant must conduct the promotional lottery in accordance with submitted modalities which cannot be altered without the written approval of the NLRC.
Are promotional lotteries required to comply with further regulatory compliance requirements outside those set by the NLRC?
Yes they are. Promotional lotteries are also required to compile with the provisions of the Federal Competition and Consumer Protection Commission Act (FCCPCA) regarding the interests and rights of consumers in promotional lotteries.
How To Obtain a National Lottery License in Nigeria
Unlike sports betting licenses (which i treated in a much earlier article), lottery licenses are for betting/odd-based games founded purely on chance, including but not limited to raffle draws and lottos.
This article will be dealing with lottery licenses, particularly in terms of:-
– Their regulatory framework
– Validity periods
– Licensing requirements
Which regulatory agency is in charge of issuing lottery licenses in Nigeria?
National lottery licenses are governed by the National Lottery Regulatory Commission (NLRC) and at the state level, the gaming/lottery authorities of various states.
What is the validity period of a national lottery license in Nigeria?
National lottery licenses are valid for a period of 10 years.
What are the requirements for the grant of a National Lottery License?
– An application letter (prepared by legal counsel).
– A completed NLRC application form.
– A non-refundable application and processing fee of 2 Million Naira only.
– A license fee of 100 Million Naira upon successful completion of all documentary processes.
What constitutes the necessary information needed to process and successfully grant an application for a national lottery license?
General Business Information
– Copies of the applicant company’s certificate of incorporation, memorandum and articles of association and the particulars of the company’s shareholders and directors.
– A minimum share capital of 100 Million Naira.
– Evidence of filing annual returns to date with the Corporate Affairs Commission (CAC).
– A profile of the company and each of its directors.
– Address of applicant’s administrative office.
– Domain name registration details.
– Brand name, trade name, logo and colours.
– Name and profiles of all directors and key personnel including company secretary, compliance officer, accountant, ICT Manager, Operations manger, agency managers and customer care manager.
– Qualification and relevant industry experience of key personnel.
– Evidence of tax payment by directors and key management staff.
– Organogran and proposed organizational structure.
Operational Information
– Description of operations structure.
– A Lottery industry analysis including SWOT analysis and competitive advantage of the proposed lottery scheme.
– A marketing and distribution plan showing expansion plans across the states and regions of Nigeria.
– Details of the applicant’s proposed distribution channels.
– Details of planned lottery games.
– Type and frequency of draws.
– Proposed odds system .
– Applicable rules for the lottery scheme.
Financial Information
-The proposed investment in the business
– Sources of funding and financing plans :- equity, foreign investment, loans and applicable terms of investment.
– Evidence of financial capability to fund the lottery scheme including company’s bank statement of the last 2 years.
– Financial projection for Year 1-5 of the business.
– Details of payment solutions provider and proposed integration plans with payment solutions provider.
Technical Information
– Profile of technical service provider, partners, telecoms providers and suppliers including :-
a). Web developer and hosting provider
b). Database/Back-up service provider
c). Manufacture of hardware :- servers, draw machines, terminals.
– Contact details of service providers and suppliers.
– Software :- Details of operating system and database application specification.
How To Obtain a National Mobile Lottery/Gaming License in Nigeria
This article focuses on gaming schemes with the elements of chance offered to the general public using mobile/telecommunication channels which in this context includes SMS (short message services), USSD, Mobile applications and any other Telecomms-enabled channels.
The regulatory framework governing this type of gaming license is also applicable to lottery schemes conducted on telecommunications operators by lottery value added services and other 3rd party content providers offering lottery-related schemes, or schemes with elements of chance in distributions of stated prizes.
Which regulatory agency is in charge of national mobile lottery/gaming licenses in Nigeria?
Gaming licenses of this nature fall under the jurisdiction of the National Lottery Regulatory Commission (NLRC).
What exactly are lottery-related schemes?
Lottery-related schemes include skill-based initiatives, predict and win games, core lottery and betting, and loyalty-based promotions.
What is the time stipulation for making an application for a grant of mobile lottery/gaming license?
Applications for this type of gaming permit must be submitted and granted 30 working days before the start date of the scheme.
What are the regulatory requirements for Value Added Service (VAS) providers and 3rd party service providers if any?
In addition to fulfilling the stipulated conditions of the permit applied for, the VAS provider/applicant will submit for consideration by the NLRC :-
– Details of telecommunication providers, aggregators and other 3rd party providers involved in the scheme.
– Copies of the partnership agreement, be it as a Memorandum of Understanding or Service agreement, with the Telecomms provider, financial institutions, aggregator, content providers and/or 3rd party provider executed for the purpose of the scheme.
– Applicants must ensure that all agreements/MOUs/Service Level Agreements take cognizance of the mandatory requirement to comply with the relevant provisions of the National Lottery Act particularly regarding prize funds and contributions to the National Lottery Trust Fund.
What are the requirements needed for the grant of a proposed mobile lottery/gaming scheme?
– An application letter stating the intention of the application.
– A non-refundable application/processing fee of 2 Million Naira payable to the NLRC.
– A permit fee of 5 Million Naira valid for 1 year upon successful completion of all documenting processes.
– A description of the nature of the product/service being promoted where applicable.
– Detailed modalities of the mobile lottery including the name of the scheme, duration of the scheme, value and categories of prizes to be won.
– Terms and Conditions of eligibility, qualification and participation in the lottery scheme.
– Details of selection/draw process and applicable rules.
– Frequency of draws/selection of winners and proposed draw dates.
– Terms and Conditions attached to claiming prizes, modalities for distribution of prizes and proposed prize presentation dates.
– An indication of whether the lottery promotion is being run on behalf of or in partnership with a 3rd party entity.
What type of due diligence-based Corporate information is required by the NLRC for a grant of this type of gaming license?
– A certificate of incorporation and Memorandum and Articles of Association.
– Registered/administrative office address of the Value Added Service (VAS) provider/applicant.
– Contact details of key personnel in charge of the mobile lottery/gaming scheme.
– A 6-month bank statement showing financial capability to conduct the scheme.
What are the conditions of approval regarding mobile lottery/gaming scheme licenses?
– All applicants must connect to the NLRC transaction reporting and monitoring platform within 14 days of commencing the promotion.
– A permit fee of 5 Million per annum.
– Payment of 5% gross monthly proceeds on earnings by the applicant.
– Submission of monthly reconciliation reports on transactions in the approved format.