Who Can Regulate Lottery Business in Nigeria?

This question is prompted by the reported resolve of the House of Representatives, through its Committee on Governmental Affairs, last week, to investigate the sector, with a view to addressing perceived weaknesses and recommending measures for harnessing its potential. Apart from the purported existence of unlicensed lottery operators in the country, the Committee’s major concern, is the seemingly abysmal level of remittances by lottery operators to Government.

According to Committee Chairman, Mal. Husseini Suleiman–Kangiwa, with a population of over 180 million, Nigeria’s annual lottery remittances of N700 million, pales significantly beside those countries with much smaller populations, such as Morocco (Population: 32 million, remittances: N576b), Cote d’Ivoire (Population: 23.7 Million remittances: N2.7billion) and Togo (Population: 7.4 million remittances: N1.8billion).

The fact that in the 11 years since those remittances began, the industry has generated revenues in excess of N1.5 trillion, underscores the pre-eminent position of lotteries as a leading revenue earner for the country, next only to oil and gas, customs and excise, the FIRS and agriculture. Accordingly, its potential is all-too-obvious, hence, the obligation on any responsible government to harness and maximise same.

This is all well and good, but for one small issue: Can the House – and, by extension, the Committee – legally exercise oversight over lotteries?. Who may validly regulate the sector? This paper attempts some answers, but first,

What are Lotteries? According to Blacks Law Dictionary, 8th edition, page 966, a lottery is "a method of raising revenues, especially state/government revenues, by selling tickets and giving prizes to those who hold tickets with winning numbers that are drawn at random". A more detailed definition is to be found in Chambers English Dictionary, 2006 edition, page 951, which defines lottery as “an arrangement for the distribution of prizes by lot; a game of chance (not involving skill) in which prizes are distributed to purchasers of tickets chosen by lot; a matter of chance".

Statutory Sources According to Sections 204 and 240 of the Penal Code and the Criminal Code, in force in Northern and Southern Nigeria respectively, a lottery is "any game, method or device whereby money or money's worth is distributed or allotted in any manner depending upon or to be determined by chance or lot". The National Lottery Act, Cap. N.145, LFN 2010, Section 57 defines it as "any game, scheme, arrangement, system, plan, promotional competition or device for the distribution of prizes by lot or chance, or as a result of the exercise of skill and chance or based on the outcome of sporting events, or any other game, scheme, arrangement, system, plan, competition or device, which the President may, by notice in the Gazette declare to be a lottery and which shall be operated according to a licence".

I believe that this last source, i.e., the National Lottery Act, 2005, is problematic, because it is doubtful if the National Assembly is competent to regulate lotteries in Nigeria. This issue is topical, in the light of the potential of lotteries as revenue-earners which we have earlier pointed out. As far as law-making and regulation are concerned, lottery as a specific, stand-alone subject, is not contained in either the Exclusive Legislative List or the Concurrent Legislative List of the Constitution of the Federal Republic of Nigeria, 1999. It is elementary that, the National Assembly can only legislate on a matter in respect of which it is specifically empowered under the Constitution: DOHERTY v BALEWA (1961)2 S.C.N.L.R. 256 @ 258

Lotteries As Criminal Offences Prior to the enactment of the National Lottery Act, 2005, the Criminal Code and the Penal Code in force in Southern Nigeria and Northern Nigeria, respectively, had prohibited lotteries in identical provisions contained in Sections 204(l)(a)-(d) and 240A(a)-(d), respectively, thereof, as follows: "Whoever - (a) gives or sells or offers for sale or delivers any lottery ticket or pays or receives directly or indirectly any money or money's worth for or in respect of any chance in or event or contingency connected with a public lottery; or

(b) Draws, throws, declares or exhibits expressly or otherwise the winner or winning number, ticket, lot, figure, design, symbol or other result of any public lottery; or

(c) Writes, prints, publishes or causes to be written, printed or published any lottery ticket or any announcement relating to a public lottery; or

(d) Advances, furnishes or receives money for the purpose of a public lottery shall be punished with imprisonment which may extend to six months or with fine or with both".

Additionally, Sec. 240A(e) of the Criminal Code penalises "every person who in any manner carries on or assists in carrying on or invites or solicits any person to take part in a public lottery" with imprisonment for six months or a fine of fifty pounds. It is obvious that the provisions of Sections 240A(a)-(e) & 204(l)(a)&(d) of the Criminal Code/Penal Code, are inconsistent with those of National Lottery Act, 2005. This is because, whilst the former categorically ban lotteries at the pain of prosecution, the latter expressly legalises and regulates it. Clearly, both cannot co-exist, as one has to give way to the other: MIN. OF JUSTICE v A. G. OF LAGOS STATE (2013) All FWLR pt 704 pg. 1.

That being the case, the question is: either the National Assembly has repealed the said provisions of the Criminal and Penal Codes - albeit by implication - or it hasn't. Which brings us to the all-important question posed at the beginning of this piece: "Who is competent to regulate lotteries in Nigeria? Is the National Assembly competent to do so, as it has purportedly done through the National Lottery Act, 2005? As previously submitted, the power of the Assembly to legislate on any matter must be conferred specifically by either the Exclusive Legislative List or the Concurrent Legislative List of the Constitution - it is not to be inferred.

Whilst the ipsissima verba of the Constitution is silent on "lotteries", Item 62 of the Exclusive Legislative List thereof, however, appears to confer a general power on the National Assembly to regulate "trade and commerce". The Oxford Advanced Learners' Dictionary, 6th Edition, defines these terms in pages, 223 & 1270 as follows, respectively:

- "Commerce": "Trade, especially between countries; the buying and selling of goods and services";

- "Trade": "the activity of buying and selling or of exchanging goods and services between people or countries"

Assuming that lotteries are covered by these definitions, the next question is whether the power given to the National Assembly by Item 62 of the Exclusive Legislative List of the Constitution to legislate on trade and commerce, extends to lotteries. I submit that, it does not. This is because in A. G. OF OGUN STATE v ABERUAGBA (1985) 1 NWLR pt.3 pg.395 @ 405C, the Supreme Court held (in relation to Item 61 of the Exclusive List of the 1979 Constitution - which is identical in terms, with Item 62 of the 1999 Constitution), that:"the Constitution does not confer on the Federation exclusive power over trade and commerce. . . , all the Governments (Federal, State and local) have been accorded their respective shares to control trade and commerce. Accordingly,... the trade and commerce power of the Federation is limited to the sub-items (a) to (f) (of Item 61)."

Lottery is not one of those sub-items. To that extent, I submit that the National Lottery Act 2005 is ultra vires the National Assembly: DOHERTY v BALEWA, supra. This is because, that power is deemed to reside in the States, as its subject-matter is deemed to be contained in the Residual List of the Constitution, in respect of which only States are competent to legislate upon: A. G. ABIA v A. G. OF THE FEDERATION (2006) All FWLR pt. 338 pg. 604 @ 674. This position is supported by EDET v CHAGOON (2008)2 NWLR pt. 1070 pg. 85 @103 where the Court of Appeal held - albeit in relation to pools betting and casino gaming (which are similar, if not identical, to lotteries) - that, to the extent that neither pools betting nor casino gaming are contained in either the Exclusive or Concurrent Lists of the Constitution, the National Assembly was incompetent to legislate on them. See also Item 5 of Part II of the Schedule to the Taxes and Levies (Approved List for Collection) Act 1998, which confers on State Governments the exclusive right to collect tax on lotteries.

Conclusion i) The National Assembly is incompetent to regulate lotteries, because that power is not conferred on it by either the Exclusive Legislative List or the Concurrent Legislative List of the Constitution: only State Houses of Assembly are competent to do so;

ii) They (i.e., States) have exercised this power, by criminalising lotteries within their respective jurisdictions, vide Sections 206 and 240A of the Penal Code and the Criminal Code, as aforesaid;

iii) It follows that until these provisions of the Penal Code and Criminal Code are validly repealed by any interested State Legislature, the operation of lottery business anywhere in Nigeria is, strictly speaking, a criminal offence.

In the light of the foregoing, is the House Committee investigation into lotteries quixotic, or is it merely whistling in the dark?

“THE NATIONAL ASSEMBLY IS INCOMPETENT TO REGULATE LOTTERIES, BECAUSE THAT POWER IS NOT CONFERRED ON IT BY EITHER THE EXCLUSIVE LEGISLATIVE LIST OR THE CONCURRENT LEGISLATIVE LIST OF THE CONSTITUTION: ONLY STATE HOUSES OF ASSEMBLY ARE COMPETENT TO DO SO”