The first members of the NLB were appointed in 1998, the year following the passing of the Lotteries Act. Under the chairmanship of Mr Joe Foster, the board prioritised the task of advising and assisting the Minister of Trade and Industry in awarding a licence to a suitable operator to run South Africa’s first National Lottery for the first seven years.
In August, after a thorough adjudication process, then Minister of Trade and Industry Alec Irwin formally appointed Uthingo Management as the first National Lottery operator.
Professor Vevek Ram, who started off as a board member, was appointed as chief executive officer of the NLB.
President Thabo Mbeki launched the National Lottery on 2 March 2000 at a ticket terminal in Langa, Cape Town. The first live Lotto draw took place on 11 March 2000.
In March, 80 organisations became the first beneficiaries of the National Lottery when “emergency” disbursements worth R4.1 million were made. The beneficiaries were organisations that had been funded through scratch card competitions prior to the establishment of the Lottery and who claimed experienced financial difficulty during the transition to the new Lottery-based funding system.
In April, regulations were promulgated to regulate the running of “society lotteries”. These are lotteries organised by non-profit organisations to raise funds from the public.
The Minister of Trade and Industry initiated the process of appointing members to the three distributing agencies – the Distributing Agency for Charities, the Distributing Agency for Arts, Culture and National Heritage, and the Distributing Agency for Sport and Recreation – in preparation for the calls for funding applications in these sectors.
The NLB established the Central Applications Office (CAO) which was to become the administrative support structure that would assist the distributing agencies in their work.
The three distributing agencies made the first sector-specific calls for funding applications between March and July. This led to the allocation of a total R222.5 million to 1 240 organisations across the three sectors, which was a huge boost of much-needed funding to NGOs in South Africa.
National Lottery contributions to the NLDTF exceeded R1 billion for first time in the 2002/3 financial year. The amount allocated to beneficiaries increased dramatically from the previous year to a total of R735.6 million.
The chair and most members of the NLB were appointed for a second term in October 2003. Mr Negota replaced Adv. Dukada who was not available for a second term.
The NLB and Uthingo jointly set up the Responsible Gambling Committee and conducted an awareness campaign under the slogan: “Play responsibly. Remember . . . it is only a game”.
Uthingo and the NLB commissioned the Bureau for Market Research at the University of South Africa to conduct research on lottery-playing patterns. This showed that seven out of 10 people played the Lottery regularly, but only 1.2 percent displayed the potential to become compulsive gamblers. On average, less than 0.5% of household income was spent on Lottery tickets.
In May, the regulations on the conduct of promotional competitions, which had taken several years to finalise, come into effect.
Lottery revenue reached a plateau and contributions to the NLDTF also levelled off at a little over R1 billion a year.
The need to take action to enforce regulations on promotional competitions emerged, as multiple infringements were detected in cell phone-based promotions.
The number of organisations benefitting from the NLDTF in the 2005/6 financial year exceeded 2 000 for the first time.
In July, 18 months before the expiry of Uthingo’s licence, the Minister of Trade and Industry called for proposals for the second operating licence for the National Lottery.
On 31 March, the term of office of first distributing agencies came to an end. New agencies for the Charities Sector and Arts, Culture and National Heritage Sector were appointed by the Minister in June, while the new Sport and Recreation Distributing Agency came into being in December.
In September, the Minister awarded the second operating licence for the Lottery to Gidani (Pty) Ltd.
In November, Uthingo launched a court challenge to the awarding of the licence to Gidani.
The NLB instituted High Court action for contraventions of the Lotteries Act against Firstrand Bank Ltd for its “Million a Month” promotional competition and against the South African Children’s Charity Trust and the SABC for the “Winikhaya” competition.
In March, the High Court set aside the Minister’s awarding of the Lottery operating licence to Gidani.
In the same month, Uthingo’s original licence expired. This meant that there was no licensed operator and for six months there was no National Lottery.
In September, having attended to the deficiencies identified by the High Court in the licensing process, the Minister again awarded the licence to Gidani.
In October, the National Lottery was back in business and the share of revenue earmarked for the NLDTF was increased to 34%.
Despite the interruption to the Lottery and a lower allocation to the NLDTF from ticket sales, the distributing agencies still allocated over R970 million from the NLDTF to applicants who met the funding requirements.
The Lottery contribution to NLDTF reached an unprecedented R1.4 billion.
Two protracted court cases on the unlawful nature of two promotional lotteries – involving Firstrand Bank’s “Million a Month “promotion and the SA Children’s Charities Trust’s “Winikhaya” competition – concluded with judgments favourable to the NLB.
In December there was a significant changing of the guard at the NLB. The founding chair and majority of members had served the maximum of two terms. Professor Ntshengedzeni Alfred Nevhutanda was appointed to the chair and a new board was put in place.
The Consumer Protection Act replaced part of the Lotteries Act as the legislation governing the running of promotional competitions. The NLB remained the authority responsible for monitoring and enforcing compliance.