Uganda launches privately operated national lottery

Garance Limouzy July 31, 2024

Ugandan lawmakers have celebrated the inauguration of the country’s new National Lottery. As Uganda, Kenya, and Tanzania prepare to jointly host the 2027 Africa Cup of Nations (AFCON), the funds generated by the lottery will play a crucial role in developing the necessary infrastructure. However, several concerns have been raised. “I’m optimistic that the National Lottery is going to significantly benefit our country, offering opportunities to the citizenry across all social classes. I am confident that under ITHUBA, we will see growth and integrity in lottery operations,” said Prime Minister Robinah Nabbanja. The official launch of the National Lottery took place on July 26, but lottery ticket sales have been ongoing since June.

A South African operator

ITHUBA Uganda, a subsidiary of the South African National Lottery operator, was licensed on August 8, 2023, to be the exclusive operator of the National Lottery for ten years. ITHUBA Uganda has already invested over $41 million into the Uganda National Lottery.

“We have endeavored to uphold international best practices to ensure our operations are transparent and promote significant benefits that contribute to Uganda‘s development and transformation,” said Kabonero, chairman of ITHUBA Uganda.

Worries among lawmakers and experts

The government’s decision to choose a private company to run the national lottery has raised significant discontent and concern among lawmakers.

“We still have not sorted out issues of standards, and now there is a mega national lottery coming up. We previously had Premier Lottery and JADA, which made some people rich,” expressed MP Joel Ssenyonyi, opposition leader, when ITHUBA’s name was disclosed.
Different have revealed a very high prevalence of problem gambling among Ugandan secondary school students. Several experts have called for a change to protect the population from gambling harm: “On the policy front, we propose that the public should be protected from over-stimulation of latent gambling through the limitation of gambling opportunities: by imposing tighter restrictions on advertising; tighter restrictions on entry into gambling establishments, based on age; and limitation of opening hours among others”.

Promoting big wins: the risks of highlighting financial gains

Despite advice from researchers focused on gambling addiction and gambling harm, Chairman Mabuza, the CEO of ITHUBA Uganda, promoted the company by highlighting the potential financial gains. “I’m still deeply moved by the story of Phionah, a mother of two who recently won Shs8m in our lottery. She came to our offices with a dream of owning land, and her win made that possible. It’s inspiring to see how many people use their winnings positively, and we hope to hear more of these stories,” Mabuza said to the press. Gamblers who view gambling primarily as a way to make money rather than as a form of entertainment are much more likely to develop problem gambling behaviours.

Increased tax revenues

The Lotteries and Gaming Regulatory Board reported a tax collection of UGX 193 billion (approximately $52 million) over the past fiscal year. With the introduction of the National Lottery, this figure is projected to rise to UGX 300 billion (over $80 million). The increased revenue is largely attributed to the launch of the National Central Electronic Monitoring System (NCEMS) in January 2024, which allows for real-time tracking of industry activities.

Jobs, infrastructure, education, healthcare: the government promises

The partnership is expected to create 1,700 direct jobs and over 100,000 indirect jobs. “The National Lottery, beyond being a means with which to cultivate our community development, is a catalyst and mechanism for socioeconomic transformation. The Lottery will enable Ugandans in every region, across industries,” said the chairman of ITHUBA Uganda, Kabonero. Finance Minister Matia Kasaija declared: “We envision the National Lottery as a key contributor to our nation’s development goals, supporting vital sectors such as education, healthcare, and infrastructure development. I have directed that this financial year’s proceeds be earmarked for the development of sports infrastructure as Uganda prepares for AFCON 2027.” The allocation of lottery funds is particularly crucial as Uganda prepares to co-host AFCON 2027, which will be the first time East Africa has hosted the event since Ethiopia in 1976. The government has allocated UGX 590 billion ($158 million) for preparations, with a new stadium in Hoima expected to cost UGX 380 billion ($102 million). “Each ticket sold is not just a chance at financial fortune but a deliberate step towards enriching Uganda’s educational, healthcare, and infrastructural landscape,” declared Aloysius Mugasa Adyeri, chairman of the Lotteries and Gaming Regulatory Board.