Environment the NLC operates in

Environmental factor Description Impact NLC’s response
Macroeconomic South Africa’s economy is no longer regarded as stable and has experienced increasing economic pressure which has been a major driver of strikes and protests.

Contributions to the NLDTF has been stagnant for the past five years. In addition, the number of registered NPOs have doubled to approximately 136 000 from 2010 to 2015 implying the additional demand for funding.

The high levels of unemployment also negatively affect disposable income. These falling levels in disposable income implies that basic needs come first and the purchase of a lottery ticket might not be a priority. This could contribute to people participating in alternative illegal activities that exhibit higher success of winnings. Through these tough economic times, it is envisaged that selling “hope” through a game of chance may prove to be lucrative on the sale of national lottery tickets. In addition, the NLC has positively contributed by creating and sustaining approximately 25 000 jobs in the 2016/17 financial year.
Economic conditions have resulted in an increased number of applications with demand for funding from NLDTF

The stagnant contributions to the NLDTF
NLC conducts research and revises funding priorities annually to address societal needs.

NLC focuses on high impact projects

NLC funding have contributed to creation of jobs as indicated in the Operations Division report
Regulatory and legislative
  • Mushrooming of illegal lotteries in the country such as Fafi and betting on the outcome of the National Lottery.
  • Unauthorised in terms of the existing legislation offering sports pools.
  • Bookmakers accepting bets on the outcome of the National Lottery are the third largest unlawful scheme facing the National Lottery.
  • Promotional competitions, formerly under the lotteries’ legislation, are estimated to be in the region of nearly R20 million per annum. Many of the competitions run for ‘promotions’ are in fact being run for profit, contravening the spirit of the promotional competition.
  • Other schemes include lottery scams, international and foreign lotteries, and permitted lotteries organised and operated outside of the legislation.
  • The lack of alignment between the Provincial Gambling Legislation and the National Gambling Bill implies that illegal lotteries will remain a threat. Fantasy Gaming is also not addressed by the legislated amendments.
  • The impact of these unlawful schemes has both an economic and social dimension. To quantify the economic impact of these schemes, the total estimated rand value of these unlawful lotteries was determined and the consequent loss of revenue for the National Lotteries Distribution Trust Fund – revenue that is used to fund good causes throughout the country. In monetary terms, this equals R643.63 million per annum, which represents the true cost of illegal schemes to the National Lottery
  • Loss of intermediate production in the national economy of R2.5 billion
  • Loss of value-addition in the national economy of R1 billion
  • Loss of 5 384 employment opportunities nationally
  • Loss of R504 million in wages and salaries to workers
  • The NLC conducted a feasibility study to determine the regulation of illegal lotteries. Findings and recommendations to be shared with policy and law makers through advising the Minister, in line with the Lotteries Act as amended
  • The NLC participated and supports the provisions aimed at repositioning and enhancing regulation of the gambling industry as proposed in the Draft National Gambling Amendment Bill.
  • The proposed amendments to the Gambling Bill could positively impact on the NLC. Amendments to the Gambling Legislation in the country could possibly provide the enforcement powers the NLC to combat illegal lotteries as well as provide opportunities through licensing bookmakers for taking bets on the outcome of the National Lottery.
  • The NLC remains of the view that many important powers relating to bookmakers and totalisators on lottery related activities currently reflected in the proposed Draft National Gambling Amendment Bill must be incorporated Lotteries Act. The NLC has been engaging the dti to seriously consider incorporating powers or duties of the NLC outlined in the Draft National Gambling Amendment Bill in the Lotteries Act
Political The NLC’s role and functions as outlined in the Lotteries Act (as amended) places an obligation on the organisation to support (directly and indirectly) the electoral mandate of Government. From a strategic perspective, the sight of government priorities provides a major opportunity for the NLC within the disciplinary context of social development and social upliftment. These include addressing unemployment and alleviating poverty in alignment with the NDP. The NLC is therefore driven by government policies on economic and social development. The NLC considers the NDP and Nine Point Plan in developing its strategies, to ensure alignment with the mandate of Government
Technological In the context of the Fourth Industrial Revolution and its disruptive effect on all economies, there are three things to consider as Africa aims to maintain its “Africa rising” narrative:

(a) The development of digital skills is paramount.
(b) All industries are being digitally disrupted, which presents an opportunity for a growing digital economy.
(c) Public-private partnerships are powerful levers for change.

The real economy and the digital economy are not mutually exclusive. The two have become one and the same as technologies blur the lines between the physical, digital, and biological spheres. The vast and growing potential of the Fourth Industrial Revolution is yet to be fully grasped. The ICT sector, industry and governments have a responsibility to unlock its potential for citizen service delivery, customer experience and innovative solutions, for a better life for all.
The increase of mobile and internet use comes with its own threats – namely cyber security, which has become a massive global problem. Prioritising cyber security capabilities is not only important for protecting organisations and their customers’ data, assets and reputations, but also fundamental to successful digital transformation.

For the NLC, online gambling has changed the landscape as people want to participate at their convenience. The scourge of illegal online lotteries and gambling has encroached into the Lottery space. The promotion of Fantasy gaming further exacerbates the situation.
The NLC’s Enterprise-wide Architecture aims to do exactly this from both an internal as well as external perspective. Entire systems of production, management and governance are being affected and, as digitisation continues, the issue becomes intimately intertwined with addressing youth unemployment, manufacturing and harnessing human innovation.

NLC has set aside necessary investments to enable staff and external stakeholders to participate in and benefit services from a secured infrastructure and enterprise architecture. Innovation remains a tool towards success, especially within an era of increasingly advancing business, social, and economical environments. We plan to introduce innovative methods of interaction, for example through use of mobile devices to allow stakeholders take on new roles as enabled and empowered participants. To capitalise on these opportunities, the NLC shall ensure that the developed technology roadmap encapsulates principles of a flexible, scalable, cost-effective and risk tolerant infrastructure and enterprise environment. It must, however, be noted that introducing new services in a network often presents challenges, among them security. At the NLC, this is addressed through the enacted ICT Governance Framework.
Governance Corporate Governance is crucial to business sustainability and growth of the organisation. The development and implementation of a proper corporate governance framework is endorsed by the Board. The Board accepts responsibility for the application and compliance with the principles of ensuring that effective corporate governance is practised consistently throughout the organisation. The impact of Corporate Governance weaknesses harm could harm the reputation of the NLC and threaten the integrity of NLC’s regulatory and grant funding activities The Board discharges this role through its charters based on a Corporate Governance Framework which is includes amongst others the principles of the Lotteries Act, PFMA, Treasury Regulations and good governance principles. These are further aligned to the organisations top strategic risks and reviewed annually.




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