NLA wins lawsuit against Fidelity Bank, Global Media Alliance
The Commercial Court in Accra has dismissed a suit brought against the National Lottery Authority (NLA) by the Fidelity Bank Limited and Global Media Alliance for halting the “Reach for Gold” promotion.
The court presided over by Justice Richard Adjei-Frimpong said the provisions in section 2(3) and Section 4(1) of the National Lottery Act 2006, Act 722 clearly indicates that the operation of any form of lottery in the country is the exclusive preserve of the NLA.
“I suppose there is a deliberate policy objective of the law to create a state monopoly over lottery in Ghana. This is perhaps for a good reason,” Justice Adjei-Frimpong said.
The plaintiffs had filed a suit at the Commercial Court challenging an order by the NLA to stop the “Reach for Gold” promotion and also asserted that the promotion does not constitute lottery as defined under Act 722.
The Fidelity Bank Limited in August 2011 engaged the services of Global Media Alliance, an events promotion company, to organise a promotion dubbed: “Reach for Gold” which started in September that year.
The promotion was such that, any customer or account holder who deposits and maintains a minimum of GH¢300 or multiples of it in his account was given a coupon or multiples of it.
Customers were notified by text messages the number of coupons they had earned depending on the cash deposits made.
At the end of the sixth month, a general draw on the all coupons was made and the overall winner was entitled to one kilogramme of gold.
The bank claimed that though they are not required by law, out of caution, they applied for permission at the beginning of the promotion to the Gaming Commission to organise the promotion, which was duly granted.
However, after the promotion had started the NLA caused its lawyers to write to both Fidelity Bank Limited and Global Media Alliance to stop the event claiming that it was a lottery being organised illegally contrary to the provisions of the National Lottery Act 2006, Act 722.
Justice Adjei-Frimpong said that it appeared that past experience had informed this policy objective adding that in the memorandum to the National Lotto Bill, it was indicated that the involvement of private enterprises in lottery has denied the state of substantial revenue.
He said it was expected that under the PNDC Law 223, when private enterprises are permitted to take part in the venture they would feed the District Assemblies with the needed revenue to aid development at the local level.
He said this expectation was not met and therefore there is now the need for the state to assume monopoly with the private sector playing a subservient role. That is why the law allows the sale of coupons by marketing companies.
Justice Adjei-Frimpong ruled that the lottery business cannot be the place for a bank to maximise profits.
The court however refused the claim by the NLA for general and special damages, legal fees and costs to be awarded against the plaintiffs.
Mr Barima Manu, Counsel for the Plaintiffs, had argued that the mandate of the Defendant (NLA) as defined under Act 722 is to conduct lottery and not to regulate promotions that do not constitute lottery.
He said on the true and proper interpretation of the provisions of the National Lottery Act, a bank that seeks to attract more customers by rewarding them for making deposits into their bank accounts cannot be said to be conducting lottery.
Counsel for the Plaintiffs prayed the court to make a declaration that the “Reach for Gold” promotion that offers prizes to customers who make deposits into their account without the requirement to pay to participate in the promotion or losing those deposits does not constitute a lottery under Act 722.
He also prayed the court to pronounce that the NLA’s letter of September 26, 2011 ordering the plaintiff to stop the “Reach for Gold” promotion was tantamount to interference in the lawful business of the plaintiff adding that the court should make an order of injunction to restrain the NLA from continuing to interfere with the plaintiff’s promotion.
Mr Addo Yobo, Counsel for the NLA, argued that the plaintiff’s “Reach for Gold” promotion was a lottery.
He said the promotion contains all the attributes of lottery. There is the prize element, to be won by chance and a consideration is given in order to participate in it.
He also argued that the launching, marketing and the promotion of the event were illegal and in contravention of the provisions of the National Lottery Act 722.
He said the defendant has monopoly over the promotion, operation and conduct of all forms of lottery and the law prohibits operation of lottery by all other persons other than the NLA.
Mr Addo Yobo prayed the court to seek certain reliefs among them are a declaration that the plaintiff’s operation of a lottery dubbed “Reach for Gold” is illegal and unlawful since the purported promotion is in breach of Section 4 of the National Lottery Act 722.
He also asked the court to make a permanent injunction restraining the plaintiffs, their agents, assigns, servants, privies and workers from promoting, sponsoring and engaging in any lottery or one disguised as a promotion in breach of Section 4 of the National Lottery Act 722.
He pleaded with the court to award general and special damages, legal fees as well as costs against the plaintiffs.