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Betting on the Outcome of National Lotteries is Illegal, Court Orders

September 9, 2021 | Financial

MPUMALANGA, South Africa (September 5, 2021) – According to a local media report the Mpumalanga high court has interdicted LottoStar from offering fixed-odds bets on the outcome of national lotteries — an activity that is outlawed and criminalised by the Lotteries Act. The matter has been before the courts since 2015.

The Mail & Guardian reported the court found that LottoStar was in contravention of the provisions of section 57 of the Lotteries Act, which states that any person who manages any scheme that directly or indirectly provides for betting on the outcome of any lottery is guilty of an offence.

In a statement, the National Lotteries Commission (NLC) welcomed the landmark judgment, which the regulator said affirms its mandate to build an environment “for safe and sustainable lotteries where the interests of participants are protected.”

The NLC and national lottery operator Ithuba Holdings took the matter to court. Ithuba claimed that the experience of placing bets on the outcome of lottery draws through LottoStar is almost indistinguishable from playing the national lottery.

According to the judgment, LottoStar thus competes for Ithuba’s customer base, but — unlike the national lottery operator — the betting platform carries no legislative obligations to make contributions to the National Lottery Distribution Trust Fund. LottoStar is only obliged to pay a tax of 1.5% of its ticket sales revenue.

The national lottery contributes about 27% of the money it raises to the fund. The money in the fund is distributed to nonprofit organisations.

LottoStar argued that a judgment declaring its activities illegal would directly and substantially affect all bookmakers with a licence under the Provincial Gambling Act. The court, however, disagreed, finding that other parties in a similar position are not legally prejudiced by the order.

The judgment noted that LottoStar does not contest that it takes fixed-odd bets on the outcome of lotteries, but that it does not believe that doing so contravenes the Lotteries Act. LottoStar argued that the bookmakers’ licence allows it to engage in this activity.

The court called this argument fallacious because the constitution “does not give concurrent competency to a provincial legislature insofar as lotteries are concerned”.

In a final takedown of LottoStar’s argument, the court concluded: “This matter demonstrates how justice is often delayed when meritless preliminary defences are raised in circumstances where no real defence to the merits lie.”

See the original article.

SOURCE: Mail & Guardian.

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