Regulating Competitions

The NLC monitors and regulates the running of various lottery competitions, including those organised by non-profit organisations to raise funds and by companies to promote their goods and services.

 

Our concern is to ensure that these competitions comply with relevant legislation, and that opportunities for financial mismanagement and fraud are greatly curtailed. Our priority is to protect the public from exploitation, but we also aim to guide organisations so that competitions are viable and achieve their fund-raising objectives.

Self-Regulation

There are some competitions where the organisers are expected, in terms of the Lotteries Amendments Act, to self-regulate their activities and ensure compliance with the law. These are generally competitions that involve a limited circle of participants.

 

They include amongst others:

  • Private lotteries, such as the office sweepstake which is strictly “in-house” and all takings are shared out as prizes.
  • Lotteries that form part of “exempt entertainment”, such as lucky ticket draws at fundraising dinners or raffles at a school fete.

The NLC has the authority to investigate and, if necessary, take action if it receives a complaint about the unlawful operation of any lottery in the above categories.

Direct NLC Regulation

The Lotteries Amendment Act treats “society lotteries” differently from the competitions outlined above because these are fund-raising ventures where non-profit organisations sell tickets on a much larger scale to the general public. Where there is no direct relationship between the organisers and the purchasers of tickets, there is a much greater chance of fraud occurring.

 

To reduce the risk of criminals abusing fund-raising lotteries, the Lotteries Amendment Act provides that:

  • Only non-profit organisations may be allowed to run society lotteries
  • Organisations that wish to run society lotteries must register in advance with the NLC
  • Organisations must comply with regulations on the running of such lotteries (or apply to the NLC for special exemption from aspects of the regulations)
  • Organisations must submit a detailed scheme or plan for the running of each competition
  • The manager of the lottery must be an employee of the registered organisation and must be certified as a lottery manager by the NLC

The regulations on society lotteries came into effect in 2000 and within a decade more than 300 societies had applied for registration to conduct fund-raising lotteries. In the great majority of cases, the applications were approved.

Promotional Competitions

Until 29 October 2010 the Lotteries Act also regulated promotional competitions that are run by companies to boost sales of particular products or services. Since October 2010 this type of activity has been governed by Section 36 of the Consumer Protection Act of 2008.

 

The NLC remains the regulating agency under the new provisions.

footer