Youssef Kaadou, is the CEO of Lottomania Nigeria Limited, a company involved in Lottery business in Nigeria. Having worked both in Nigeria, Ghana and Lebanon with different Lottery companies for two decades, Youssef boasts of an enviable record and knowledge in the lottery business in Africa
In this interview with John Bamidele, Founder gbc.ng, revealed why Nigeria still remains the target of foreign investors when thinking of an offshore investment.
Early this year, the National Lottery Regulatory Commission came out with a release saying holders of a national licence need not obtain any other licence to operate anywhere in Nigeria. What must have led to this and what has been the outcome?
Federal licenses are issued by the presidency and signed off on behalf of the president of Nigeria. The harassment of state lottery boards to various federal licensed operators to obtain state licenses allowing them to work in the state. We usually do register with them as a lottery operator and pay the registration fees, but we do not apply for a license. Our offices in many states have been closed and ceased and our terminals too. Some chose to fight them in court like “give and take” in oyo, we did not as fighting a battle separately is not good and operators don’t join hand together to fight this occurrences not to mention that some state lottery boards do it to protect certain operators. We are still fighting with state lottery boards and we are coming to separate agreements with them making it a big extra cost on the operator(s).
As a follow up to that question, the constitution of Nigeria did not explicitly state who should issue a license. I think it’s high time we had a regulatory reform and put this to a final rest.
How can a governor/state Lottery board reject a license issued by the presidency and signed on behalf of the president by a minister? NLRC was created to regulate the Lottery industry. The presidency enacted by the national assembly issued a law (National Lottery Act 2005) for that matter. After the creation, NLRC a lot of meetings with state lotteries but to my knowledge it has stopped on the percentages that will be shared and how to share them and NLRC did not conclude as they were in court with LSLB and state lost the case. Again they are in court and I think the state will win the case this time. I do agree that a regulatory reform is in order.
As an operator, is it wise to get a federal license or a State License and why?
As an operator we look to work nationally as it does not make sense to work in one state. We look to expand our business especially that we are a young operator and we need to open new markets where other operators are not in or they don’t have full control over it.
In one of our discussions, you complained bitterly on the tax regime in Nigeria across board. Want you to shed more lights on that?
The taxes paid into government coffers were stipulated in the gambling act. In the constitution below are the taxes paid to the federal purse.
i. 24-1. a licensee shall establish an operational fund to be known Application of as the ‘prize fund’ into which shall be paid a minimum proceeds of a return of 50 per cent of the proceeds of a national lottery.
ii. 24-3. A licensee shall pay to the Trust Fund established under section 35 of this Act within a period of not more than 90 days after the determination of the result of each lottery, an amount of 20 per cent of the proceeds of the lottery of the lottery for the first 5 years of the license, 25 per cent in the subsequent 5 years and thereafter 27.5 per cent.
iii. 35-1. there is established a fund to be known as the Establishment of National Lottery Trust Fund (in this Act referred to as the National Lottery “the Trust Fund”) into which shall be credited a Trust Fund percentage of the net proceeds of a national lottery as prescribed under section 24 of this Act.
iv. I think the numbers speaks for itself. In addition operators have to pay 30% corporate tax.
Definitely, this will not augur well for foreign direct investment; however the online sector in Nigeria is still attractive judging by the latest iGB Africa igaming report titled “the rise of igaming”.
iGaming is on the rise in parts of Africa. Sports betting are much faster all over Africa but still big companies are facing hurdles to operate in multiple territories. Land based shops are still the earners for major sports betting companies not the online platform.
On the issue of regulatory reforms, an operator is now a member of the National House of Assembly. Should we be expecting any reform soon?
The law in Nigeria does not allow that. Let me quote the relevant portion of Nigeria’s constitution that prohibits that. That should not be allowed by lottery act Article 22
22. No person holding a political office or in the public service of the Certain Federation within the meaning of the Constitution of the Federal restriction on Republic of Nigeria shall have any financial interest in a national lottery licensee or license.
Existing laws especially at state level were introduced to protect existing operators.
Western Lotto Claims it has sole rights to Ghana games in Nigeria. We know how lucrative Ghana games are in the country. The Federal House of Representatives, which is the lower house in the National Assembly, intervened in the matter and we have not heard anything concerning the matter again.
By Law no foreign lottery is permitted in Nigeria. It was stated in a press release by NLRC “Prohibition of Foreign Lottery Games – attached). His claims to have a direct agreement with NLA and narrative changed from one week to another (attached clips from newspaper articles). I cannot speak for the lower house. And I cannot predict outcome of court cases.
Ghana games are the most popular in Nigeria, why don’t we have popular national games?
There is no national game offering. Still private operators having their own indoor games of 5/90 similar to the Ghana game but under different branding. Most of the operators offer more option to attract stackers. Premier indoor games generate more than the Ghana games as the stackers trust them and the relationship was built over the years.
We use to have a national lottery but it doesn’t exist again. National lotteries exist side-by-side alongside other private lotteries in some jurisdictions where gaming is legalized. What is the reason for this and what can be done?
The experience of the national lottery in Nigeria failed due to the wrong choice of game and the partnering with a service provider that did not know the West African grounds and needs.
Aside from Nigeria, want you to assess lottery business in West Africa. What are the similarities and differences?
No country is similar to another as laws and restrictions differ especially when it comes to foreign investors.
Which jurisdiction is the most lucrative in West Africa and why?
All operations if well done are lucrative. Nigeria remains envy and target of all operators.
Tell us more about Lottomania, your areas of operation and product offerings.
Lottomania Nigeria Limited was incorporated in 2013 to carry on the business of lotteries and related gaming activities with the aim of building the largest lottery company in Nigeria. Lottomania founder’s team has vast experience operating in Nigeria for over 30 years, specializing in lottery, mobile marketing and regulatory aspects of Nigeria. We are a privately owned. We hold licenses for the conduct of a nationwide lottery in Nigeria and a Value Added Services (Content Services Using Short Code Numbers). Company games went live in the first quarter of 2018. We plan to cover the entire Nigerian market. We only offer fixed odd games.
A. 5/90 with extra options for stackers. Players stake up to 5 numbers with permutations. We draw 10 numbers. First five called original and last 5 out of 90 balls called machine numbers. You will match your played numbers against original or machine for full payout, or on both where you get half the payout.
B. 6/12/80. Players can stake up to six numbers with permutations, we draw 12 numbers where you can match your numbers against the 12.
C. You can play on the WEB, SMS and USSD (MTN), Terminals newly. Mobile app soon.
What’s the thinking behind your product offerings?
A. You need to have a fixed odd game.
B. Game should be played on all platforms (SMS,USSD, Mobile App, WEB and terminals)
C. We went with the 5/90 and we gave extra options for the stackers enable us enter the market. (Annex.1.)
D. We offer a 680 game with better odds for the stackers. (Annex.1.)
i. Fixed price of 100N that will allow you to win 5M Naira.
ii. Two tickets match 6 numbers each will win 5M, prize not shared.
iii. An easy to offer on mobile (SMS & USSD).
iv. The aim was to have at least a winner of the big prize on a weekly basis. If we had the numbers we could get a winner on daily basis.
Finally, what are the effects of COVID-19 on your company and what new innovations are you bringing on board?
It has affected us like any other business. We had to cut on our market expansion. We are maintaining what we have. Our technology already is designed to allow our guys to work remotely. Nothing on that side. We had to adjust our weekly meetings and monthly meetings with our regional offices. We now hold online meetings only.