The National Lottery Bill, 2023
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
Seven-Year Licence Required for National Lottery Operator
The Bill establishes a licensing framework under Section 24 where the regulatory authority issues a single licence for a period of seven years, which may be extended under specific conditions up to a maximum total of ten years. The National Lottery Board is tasked under Section 23 with procuring a fit-and-proper operator under the Public Procurement and Asset Disposal Act, 2015, with procurement starting two years before the current licence expires.
Establishing the National Lottery Fund for Good Causes
Section 43 establishes the National Lottery Fund to retain and disburse lottery proceeds to various good causes. These include:
- Charitable causes: Providing care for vulnerable children, orphans, and persons with mental or physical afflictions, and supporting the rehabilitation of problem gamblers.
- Socio-economic development: Supporting education, scientific research, and small business development.
- Sports and culture: Funding national teams and preserving cultural heritage.
- Emergencies: Responding to natural disasters and public health crises.
Up to KSh 10 Million Fine for Misappropriating Fund Assets
Under Section 51, any person who misappropriates any funds or assets of the National Lottery Fund, or assists in doing so, commits an offence. Upon conviction, the offender is liable to a fine not exceeding KSh 10 million, imprisonment for a term not exceeding ten years, or both.
KSh 5 Million Fine for Allowing Restricted Persons to Participate
Section 35 strictly prohibits certain individuals from participating in or purchasing tickets for the National Lottery. This includes children, illegal immigrants, and employees, directors, or associates of the operator, the Board, or the regulatory authority. Section 36 makes it an offence to facilitate or allow a restricted person to participate, carrying a fine of up to KSh 5 million, imprisonment for up to five years, or both.
Bill No.
No. 69 of 2023
Gazette No.
Supplement No. 211 of 2023
Sponsor
Kimani Ichung'wah
Background
The National Lottery Bill, 2023 is designed to establish and regulate a National Lottery in Kenya, creating a state-sanctioned mechanism to pool resources for charitable and socio-economic causes ("good causes"). The Bill establishes key structures, including the National Lottery Board and the National Lottery Fund, to manage, operate, and oversee lottery activities in a socially responsible manner.
Key Amendments
Establishment of the Board
Section 4 establishes the National Lottery Board as a body corporate. The Board is responsible for supervising, controlling, and monitoring lottery operations, preventing fraud, and recommending policies to the Cabinet Secretary. Under Section 5, the Board consists of a Chairperson appointed by the President, the Principal Secretary of the National Treasury, the Principal Secretary for the National Lottery, the Attorney-General, and four other members (including an Advocate of the High Court and a Certified Public Accountant) appointed by the Cabinet Secretary.
The National Lottery and Operator Procurement
Section 21 establishes the National Lottery. Under Section 23, the Board is empowered to competitively procure a fit-and-proper operator to run the lottery on its behalf, initiating procurement at least two years before any active licence expires.
The National Lottery Fund
Section 43 establishes a dedicated Fund to receive lottery proceeds and finance diverse sectors such as healthcare, education, sports, environmental conservation, and disaster relief. Section 44 places oversight of the Fund with the Board, with the Chief Executive Officer serving as the Fund Administrator under Section 46.
New Obligations
Operator Licensing and Conduct
Under Section 24, the operator must obtain a licence valid for seven years. The operator is required to:
- Pay winners within seven days of a draw (Section 40).
- Submit to regular audits of its systems, procedures, and fraud prevention methods by a person appointed by the regulatory authority (Section 41).
- Disclose details of its partners, trustees, and shareholders holding 10% or more of its equity during procurement (Section 37).
Protection of Restricted Persons
Operators must implement measures to prevent children and other prohibited individuals (such as Board staff and ticket printers) from buying lottery tickets (Section 35). This includes obtaining age verification information from customers before ticket purchase.
Cost and Spending Ceilings
- Combined operational and administrative costs of the Board and the regulatory authority are capped at 3% of the total gross revenue proceeds (Section 42).
- The Fund's administrative expenses are capped at 5% of the total funds in a fiscal year (Section 44).
Penalties
- Misappropriation of Funds: Misappropriation of National Lottery Fund assets carries a fine of up to KSh 10 million, imprisonment for up to ten years, or both (Section 51).
- Allowing Prohibited Persons to Play: Facilitating participation by children or other restricted persons carries a fine of up to KSh 5 million, imprisonment for up to five years, or both (Section 36).
- Unauthorized Ticket Sales: Selling or offering lottery tickets without authorization carries a fine of up to KSh 500,000, imprisonment for up to one year, or both (Section 34).
- Audit Obstruction: Obstructing an appointed auditor or refusing to supply requested records carries a fine of up to KSh 500,000, imprisonment for up to one year, or both (Section 41).
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