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President John Dramani Mahama has directed an immediate renegotiation of the contractual relationship between the National Lottery Authority (NLA) and KGL Technology Limited.
The President’s directive follows the conclusion of the work of a committee he set up in December last year to conduct a comprehensive review of the controversial contracts between the NLA and KGL Technology Limited.
A letter The Fourth Estate has sighted indicates the committee concluded that while the terms of the current agreement with KGL are not illegal, “the revenue-sharing structure is not financially advantageous to the Republic.”
The President’s decision comes on the back of The Fourth Estate’s investigations, which uncovered questionable arrangements that allowed the NLA to receive only GHS 157.6 million out of the GHS 3 billion revenue KGL earned in 2024.
In line with the committee’s recommendations, the President has also ordered a comprehensive review of the country’s lottery and gaming laws to align them with global technological trends and industry best practices.
Additionally, he wants measures to be introduced to protect the livelihoods of NLA coupon-based vendors, many of whom operate from kiosks across the country.
Background
In 2019, the then Director-General of the NLA, Kofi Osei Ameyaw, signed a controversial three-year contract with KGL Technology Limited to operate the NLA’s 5/90 lottery online via a USSD code. Based on the terms of the 2019 contract, KGL would have paid the NLA a total of GHS 600 million, being 20% of the GHS 3 billion the company earned as gross revenue in 2024—a figure the Group Chairman of KGL, Alex Dadey Apau confirmed to The Fourth Estate.
Upon expiration of the contract in 2022, Samuel Awuku (who succeeded Osei Ameyaw as director general) and his board renewed the contract with KGL for a 10-year period.
But before the expiration of the 10-year period, Mr. Awuku and his Board, chaired by Gary Nimako Marfo, in 2024, signed a new contract with KGL, granting the company exclusive rights to operate the 5/90 lottery online via USSD. This new contract is for 15 years (from 2024 to 2039) with an automatic renewal for another five years.
Mr. Awuku and his board also signed two other contracts for KGL to operate the 5/90 online lottery in Nigeria and Cote d’Ivoire. These two contracts were for 10 years each.
The Fourth Estate’s investigations revealed that annual revenue to KGL from the NLA’s 5/90 online lottery in 2024 alone was over GHS 3 billion or over GHS 250 million each month.
Under the terms of the deal, however, KGL was supposed to pay a total of just GHC157.6 million to NLA in 2024, for all three contracts in Ghana, Nigeria, and Côte d’Ivoire. This amount was to be increased annually by just 10% each year. The amount that was to be paid in 2024 represented a paltry 5.2% of the revenue KGL generated from the NLA’s prime business.
The National Lotto Act, 2006 (Act 722) does not allow any private company to operate any form of lottery in Ghana. It makes the operations of the lottery in Ghana the sole preserve of the NLA. Section 4(1)-(2) of the law states: “A person other than the Authority shall not operate any form of lottery.”
“A person who contravenes subsection (1) commits an offence and is liable on summary conviction to a fine of not more than two thousand five hundred penalty units or imprisonment for a term of not more than three years or both.”
The law, however, requires the NLA to contract private companies to sell lottery as Lotto Marketing Companies (LMCs).
The NLA Act also requires that all proceeds from the sales of lottery by LMCs should be paid into what is called the Lotto Account of the NLA. From this account, the NLA is then supposed to pay stipulated commissions to the LMCs.
The Fourth Estate’s investigations, however, revealed that NLA’s deals with KGL are unusual at best, and illegitimate at worst. First of all, KGL’s revenues do not go into the Lotto Account. In fact, the NLA does not even know how much KGL makes in sales. Secondly, while the law requires all LMCs to be paid a commission by the NLA, under the current deal, KGL is paying the NLA what the licence agreement describes as “revenue share.”
In 2024, the NLA was paying LMCs a commission of 25% on their sales. In these exclusive and monopolistic contracts, what KGL paid the NLA in 2024 amounted to just 5.2% of the company’s 2024 revenue.
Meanwhile, official documents from the State Interests and Governance Authority (SIGA) have revealed that NLA’s revenues have been on a steep decline from GHS 366 million in 2015 to GHS 296.58 million in 2023.
