NLA – KGL Partnership: Setting the Records Straight

KGL’s contract with the NLA can best be described as a solution to an age-old problem that predates and necessitated its partnership.

This can be traced back to approximately 17 years ago, when the NLA attempted to launch an online mobile lottery.

Following the smooth transition from manual to automated operations in 2006, the NLA decided to respond to the growing demand of the tech-savvy and younger generation for a more convenient and easy way to play the lottery, without necessarily visiting a lotto kiosk.

Management therefore introduced the Mobi-Game 2 Sure and Mobi Game Jackpot on 25^th April 2008, to enable players to participate in the 5/90 Fixed Odds Games on their mobile phones.  Players were made to select two numbers between 1 and 90 via SMS Text Messaging. An electronic ticket number was sent through the NLA database system to confirm receipt of predictions.

However, only the lucky winners were contacted and given notification codes to claim their prizes at accredited points, which placed an additional burden on players.

The porous nature of the NLA platform also led to the falsification of stakes, resulting in substantial fraudulent payouts. The game was discontinued in 2010.

In 2014, the NLA made another attempt to introduce the 5/90 Fixed Odds Games via a web application, but this attempt was also unsuccessful, and it was subsequently discontinued in 2016.

Identified Reason for failures and Way Forward

The reasons identified for the failures of these games include:

• NLA’s lack of commitment to funding investments in technology, research, and market development. It therefore became essential for NLA to adopt strategies that would make their products and services competitive and relevant to current and potential players in the shortest possible time.
• A comprehensive review of NLA’s growth strategies at the time indicated that the high levels of investment needed in cutting-edge technology to spark innovations, such as introducing its games onto digital lottery platforms to attract new market segments, could not be solely borne by NLA.
• For the Authority to sustain its operations and meet its revenue goals, partnering with reputable third parties was seen as the most feasible option with no cost to NLA. This is supported by Section 2, Clause 4 of the National Lotto Act, 2006, (Act 722) which permits the NLA to, among other things, “enter into collaboration, partnership, or joint ventures with any person, society, association, or corporate entity to operate a game of chance in accordance with existing laws”. The Establishment Act does not allow NLA to sell directly to players.

Inception of KGL

Having conducted a research study in 2017 into the Habits and Attitudes of Lottery Players in key Ghanaian Lottery markets, including Greater Accra, Kumasi, Koforidua, and Sekondi Takoradi, Keed Ghana Limited (KGL) identified the following to enable it to pitch a proposal to NLA:

• An overwhelming preference for Mobile and Web Applications as an additional channel for lottery among the youth and emerging player segments. This was a result of the significant shift underway, with digital platforms playing a key role in this evolution. As mobile phone penetration continued to increase, more people gained access to online digital platforms, and products available on these channels began to experience unprecedented growth.

• Potential lottery players preferred the convenience of playing lottery games anytime and anywhere, from the comfort of their own homes.

• The last Ghana Statistical Service Population Census conducted showed that 53% of the population was between the ages of 18 and 50, making it a youthful nation. 82% of these adults browse the internet via their Mobile Phones, 15% through Desktop Computers, and 3% through Tablets.

KGL therefore saw this development as a huge opportunity to collaborate with NLA to roll out its lottery products on these channels, leveraging their convenience. These channels also utilized Mobile Money (MoMo) platforms provided by the telcos, including MTN, Vodafone (now Telecel), and AirtelTigo. These platforms also provided players with funds to play and offered payments for their wins.

Armed with this information, the Directors of KGL, led by Mr. Alex Apau Dadey, developed a comprehensive Business Plan and submitted it to the NLA Board of Directors for consideration.

The Birth of Online Lottery

KGL’s proposal to NLA was made at a time when the NLA had also received proposals from other companies to operate online games.  They include: TekStart Afrika Limited, Globalfun Ghana Limited, Luckweb Limited, and Wotiriy3 Ghana Limited.

The then Director-General, Hon. Kofi Ameyaw, then tasked the Authority’s Business Development Committee to review and evaluate the proposals and provide advice.

One of the committee’s primary considerations was the introduction of new products and services to further satisfy new market segments at no additional cost to NLA. It was also for NLA to sustain its operations and meet its revenue targets over the next five years by partnering with reputable third parties.

Other reasons listed by the committee included:

The competitive environment within which the NLA operated was under enormous pressure. The following developments had the potential to negatively impact the realization of projected revenues in the then Financial Year and beyond:

1. The regularization of the activities of Banker-to-Banker operators will likely erode revenues accruing from the Fixed Odds game. With the payment of the License Fees, they will now be able to openly sell in markets where they had previously been unable to carry out their illegal activities.

1. Closely related to the above is that the absence of any effective monitoring and supervision at the retail level could result in NLA LMCs also devoting more time to selling Banker-to-Banker to the detriment of our products.

• The introduction of innovative products and services by the banks, telcos, and players in the fast-moving consumer goods sector (FMCGs) continued to put pressure on consumer disposable income. Purchase decisions were being prioritized over lottery products, which do not typically feature in the shopping baskets of the average Ghanaian consumer.

1. The proliferation of betting houses with a variety of games where players can place bets in Real-Time and win instantly, on the other hand, had also impacted negatively on the potential revenues that NLA could generate from potential players.

1. Finally, several attempts by NLA to launch different games like Dividend and Scratch Cards in the past had failed due to the unresponsiveness of the market as well as NLA’s lack of commitment to fund investments in technology, research, and market development.

The Business Development Committee agreed that it had become imperative for NLA to adopt strategies that would make its current and new services competitive and relevant to existing and potential players. This will ensure an increase in revenue generation for national development.

These companies were thus granted a license to operate an online lottery.

Licensing of KGL

In July 2020, following nearly a year of prolonged negotiations with the NLA, KGL received final approval to launch the 5/90 Fixed Odds Game online.

The license was presented to KGL Technology Limited by the Authority’s Board Chairman, Togbui Francis Nyonyo, and Director-General, Hon. Kofi Osei-Ameyaw, in the presence of other board members, representatives of KGL Technology Limited, and its subsidiary company.

KGL Technology Limited was granted a license to operate the NLA 5/90 official short code, *959#, and other digital platforms under the brand name Keed-NLA.  Its core objective was to advance the digitalization of lotteries on behalf of the NLA, which aligns with the government’s digitization policy.

Benefits for Players

KGL Technology’s goal in partnering with the NLA was to bridge the gap between traditional lottery players and the potential of technology, ensuring that the digital lottery platform was accessible to everyone, regardless of their location or technical expertise. The first significant milestone came in early 2019 with the launch of the integrated digital lottery platform. This was a game-changer. For the first time, players could access the 5/90 suite of lottery games via their mobile phones, computers, and other digital devices.

To make the lottery more accessible, KGL Tech leveraged the Group’s strategic partnerships with major mobile network operators in Ghana. These partnerships enabled KGL Technology to integrate lottery services directly into mobile carrier platforms and enhanced internet connectivity for availability via app and website, reaching a wider audience – particularly younger, tech-savvy players, who did not want to be seen at the lotto kiosks – and encouraged participation from the comfort of their homes, offices, and on the go.

This meant players could now purchase lottery tickets, check results, and even make claims via a dedicated customer service portal—all through their mobile phones, without needing an internet connection. This was especially crucial for reaching remote communities, where mobile data was less accessible from a cost perspective, although it was widely available. By aligning with mobile carriers, KGL Technology’s digital platform effectively turned every mobile phone into a gateway for participating in the NLA’s 5/90 lottery, thereby democratizing access nationwide. This milestone marked a new era of inclusivity in the lottery gaming industry.

Additionally, KGL Technology implemented secure, cashless payment methods, enabling players to use mobile money, bank-to-mobile transfers, and other digital wallets, thereby eliminating the need for existing cash-based ticket transactions. This move was incredibly significant, especially in a country where mobile money had gained traction and acceptance. In doing so, KGL Technology not only made the process more efficient but also aligned the lottery experience with Ghana’s rapidly growing digital financial ecosystem.

This operation has been instrumental in overcoming the previous barriers to entry. Players no longer had to rely on physical locations or face the associated social stigma of queuing at lottery kiosks – they could now participate in the NLA 5/90 on their own terms. The ‘lottery anytime, anywhere’ tag translated directly in local parlance as ‘Eda wonsem’ (i.e., ‘It’s in your hands’). This shift toward mobile and digital platforms also set the stage for future innovations in the lottery space.

To make it even more robust, KGL prioritized Security as a key focus, and as such, KGL Technology’s platform integrated industry-leading encryption technologies to protect player data and ensure the safety of financial transactions. This level of security not only fostered trust among players but also solidified the wider KGL Group as a leader in responsible gaming and a champion for player rights.

The second significant milestone following the execution of the provisional period was the issuance of a ten-year license under a partnership agreement between the NLA and KGL Technology Limited. The license granted KGL Technology the mandate to continue operating and managing the digital 5/90 lottery products, provided it successfully satisfied all the technical and financial conditions set by the Authority.

FINANCIALS

NLA Revenue Renegotiation From 2021

• As of the time of signing, KGL Group’s contract with the Authority had negotiated a sum of Twenty-million Ghana cedis (20,000,000.00).

• KGL Group’s contract with the Authority was increased to Twenty-Five million Ghana cedis (25,000,000.00) in 2021.

• 2022 – Together with the NLA Governing Board, the then Director-General, Mr. Samuel Awuku, renegotiated the contract to Fifty million Ghana cedis (GHS 50,000,000.00)

• An additional five million Ghana cedis (GHS 5,000,000.00) was negotiated – With Two million Ghana Cedis (GHS 2,00,000.00) supporting the NLA’s Good Causes Foundation and Three million Ghana Cedis (GHS 3,00,000.00) going into a stabilisation fund for Lotto Marketing Companies (LMCs).

• 2023 – The contract was renegotiated to Sixty-five million Ghana cedis (GHS 65,000,000.00) plus royalties of Eighteen Million Ghana Cedis (GHS 18,000,000.00) and Thirteen Million Ghana Cedis (GHS 13,000,000.00) respectively, for the operation of NLA Games online in Nigeria and the Ivory Coast, bringing the total to Ninety-six Million Ghana Cedis (GHS 96 0000,000.00).

• 2024 – The contract sum was renegotiated to One hundred and fifty-seven Million Ghana Cedis (GHS 157,000,000).

• Additional Annual Advertising Fees to NLA – One million, five hundred thousand Ghana cedis (GHS 1,500,000)

Audited KGL Financial Statement as of December 31, 2024

• Revenue accrued from Digital Services =    GHS 3 billion
• Payment of Wins       =    GHS 2 billion
• Taxes to GRA      =    GHS 87 million
• Payment made to NLA        =    GHS 157 million
• Net Profit to KGL After Tax and Expenses          =    GHS 70 million

NB:

• It is worthy of note that for the NLA to realize the sum of One hundred and fifty-seven million Ghana cedis (GHS 157,000,000) through its own business operations, it would have to sell a gross amount of Nine hundred and fifty million Ghana Cedis (GHS 950,000,000). The highest revenue the NLA had ever generated since 2015 was four hundred and two million Ghana Cedis (GHS 402,000,000) in 2017.

• It is also worthy of note that the NLA’s establishment Act, the National Lotto Act, 2006 (Act 722), does not allow the NLA to sell directly to its players, thus the use of Lotto Marketing Companies to retail products on behalf of the Authority and third-party collaborators, including KGL, to operate online games.

• Although revenue from the traditional Point of Sale Terminals (POSTs) declined, it was complemented by revenue from third-party collaborators operating different games on different channels. This can be verified from the NLA’s financial audited statements by the Auditor-General.

Looking Into the Future

KGL Group takes pride in the role its technology subsidiary has played in shaping the digital lottery landscape in Ghana.

Its financial contribution to the NLA, to the Government, in the form of taxes and through the KGL Foundation, has been enormous.

In the digital era, where players sought convenience and comfort to play the lottery, and the NLA was a partner in advancing the digital cause, KGL was a solution, not a liability.

Its journey through digitalized lottery gaming has been characterized by progress, innovation, and a shared vision to serve the people of Ghana better and beyond. Starting from humble beginnings, the Group has effectively utilized technology to transform the way Ghanaians engage with lottery games, making them more accessible, secure, and transparent.

Its success is credited to the trust and support of relevant local regulators (National Communications Authority (NCA), Ghana Revenue Authority (GRA), and the Bank of Ghana (BoG)), as well as loyal patrons, corporate partners, and stakeholders across the entire value chain.

As the Group looks ahead, it remains dedicated to leading in digital lottery gaming, ensuring that every Ghanaian, wherever they are, has the opportunity to dream big, play confidently, and win.

Writer: Samuel Awuku. Former Director-General, NLA