ASSESS
Our material matters
Our approach to materiality
Matters are considered material if they have the potential to impact our performance significantly and therefore our ability to create value over the short-, medium- and long-term.
Our assessment of materiality involves identifying those matters that affect our regulatory mandate to create a safe and sustainable lotteries industry while protecting participants and maximising revenue to ensure a sustainable fund for good causes.
Our material matters arise from a variety of issues, such as interdependence on government policies, local and international market trends, as well as South Africa’s socioeconomic environment.
DETERMINE
Our Board engages with material matters in the development of the strategy and strategic risk review. The Board also provides oversight in ensuring that the NLC proactively addresses identified material matters.
Our executive management ensures that material matters are managed appropriately and remain relevant.
ENGAGE
We pride ourselves on engaging extensively with our stakeholders to identify risk and opportunities.
MACROECONOMIC CONDITIONS
With the persistent challenges facing the South African economy, including poverty and low levels of employment, as well as an urgent need for economic growth, we continued to face challenges in meeting the unrealistic demand on the NLDTF.
We continue to look for innovative measures to maximise revenue while encouraging and channelling our valued beneficiaries to explore other forms of funding through the introduction of society lotteries and innovative projects to support the sustainability of their organisations.
INTERPRETATION OF LEGISLATION
Interpretation of the Lotteries Act, No. 57 of 1997, specifically regarding the Appointment of a Chairperson of the Board, remained a challenge where if interpreted incorrectly, the appointment of the Chairperson has a potential of adversely impacting the operations of the Commission.
CHALLENGES IN REGULATION
The Lotteries Act requires amendment to ensure that the NLC has full regulatory powers. These include the issuing of penalties for certain regulatory breaches and inspectorate powers to police and enforce the Act on illegal operations.
Administrative penalties are tools used by regulators to enforce compliance with legislation. These penalties should be of a monetary value and be imposed without reliance on a court process for the enforcement thereof.
Powers to appoint inspectors with all required enforcement powers to conduct inspections on illegal lotteries would assist in effective execution of the mandate of policing lotteries. Challenges identified by the Board in regulating the lotteries industry include conflicting legislation and different regulators for gambling, as it’s separated from lotteries which create ambiguity in regulation and a lack of enforcement powers to effectively regulate lotteries.
ONLINE GAMING
The lottery industry remains competitive, with licenced and registered local lotteries finding themselves competing with foreign lotteries due to online platforms. Online gaming is providing more options for consumers; however, it is also threatening the revenue generated by traditional lottery operators. The proliferation of online operators also poses threats to the restrictive legislated environment.
The global lottery industry is coming to grips with the rapid changes resulting from online gaming and the use of technology. Within this context, the NLC is expected to regulate the lotteries and sports pools industry and curb the scourge of illegal lotteries. The NLC is further expected to advise the Minister on the issuing of the licence to conduct the National Lottery and sports pools while ensuring the National Lottery and sports pools are conducted with all due propriety; that the interests of every participant in the National Lottery are adequately protected and that the net proceeds of the National Lottery are as large as possible.
SUSTAINABILITY OF THE NATIONAL LOTTERY AND SPORTS POOLS
The Board developed and submitted the Request for Proposal for the Fourth National Lottery Licence Strategy and Draft Proposal to the Minister of Trade, Industry and Competition and sports pool licences.
Delays in implementation of the strategy may have adverse results on the sustainability of the National Lottery and sports pools.