MTN, NLA in legal battle over 'MTN Dream Big' Promo
5/4/2012 10:33:01 PM -
MTN Ghana has filed a suit in an Accra Fast Track High Court questioning the authority of the National Lotteries Authority (NLA) to prevent MTN from carrying on with recently launched 'MTN Dream Big' Promo.
The company filed for an order of Qua Warranto (asking what authority the NLA's has) and for an injunction on April 5, 2012, to prevent NLA from stopping the 'MTN Dream Big' Promo, but the court referred the application for injunction to the Chief Justice while hearing on the Order of Qua Warranto proceeded.
This is unprecedented as it was usually the NLA that took one telco or the other to court insisting that the telcos' marketing promotions were illegal lottery in disguise.
MTN launched the 'Dream Big' promotion on March 20, 2012 giving the chance to customers to send SMS to short code 2020 at a premium rate of 75Gp per SMS and stand the chance of winning GHS10,000 daily, plus two cars to be at the end of the 100-day promo.
The company got approval from the Ghana Gaming Commission to run the promo, but NLA wrote to MTN raising questions about the promotions in the light of Section 4 (1 and 2) of the National Lotto Act, Act 722, 2006.
The Section 4 (1 and 2) prohibits all other persons and organizations from operating lottery apart from the NLA, and provided sanctions for persons and organizations, which contravened the prohibition.
But Section 56 of the Act, which interpreted key operational words in the Act 722, defined lotto as 'a scheme for the distribution of prizes by lot or chance especially a gaming scheme in which one or more tickets bearing particularly numbers draw prizes and the rest of the tickets are blanks.'
The Gaming Commission had always challenged the NLA's authority to stop 'games of chance' by telcos, on the basis of the fact that the law defined lotto to include drawing of tickets bearing numbers, and according to commission, the promos ran by telcos did not have tickets bearing numbers.
So MTN chose instead to go to court to challenge the authority of the NLA to stop the 'Dream Big' promo.
MTN said in its statement of case to the court that the Gaming Act, Act 721, 2006 authorized the Gaming Commission to sanction all games of chance like the MTN 'Dream Big' promo, except National Lotto.
Section 72 of the Gaming Act defined a game of chance to have three main features - customers paying a premium rate for a chance to win, a draw, and winning to be only by chance.
But the NLA also filed an application for injunction at the Commercial Court to prevent MTN from continuing with the Dream Big promo, whiles MTN's suit was being heard; but MTN also filed a counter application seeking to strike NLA's suit because the details of both cases were the same.
The court did not agree to strike out NLA's suit as requested by MTN, so MTN appealed against the hearing of NLA's injunction case, and it was postponed to June 4, 2012, pending the ruling on MTN's Appeal against the injunction, slated for May 21, 2012.
Ahead of the hearing of MTN's appeal, the NLA has gone to the Supreme Court and sued the Gaming Commission, two of its directors and MTN, essentially questioning the mandate of the Gaming Commission, in particular, to authorize any games of chance in Ghana because it had no Board of Directors, and seeking to stop MTN from continuing with it 'Dream Big' Promo.
The NLA is also questioning the authority of the Gaming Commission and its directors to issue permits to organizations to hold games of chance, and it is also questioning the authority of the commission and directors to charge a fee amounting to five per cent of the total cost of any game of chance an organization puts up.
The NLA also wrote to the Minister of Interior, under whose authority the Gaming Commission was, over the same matter.
Meanwhile, in a similar case involving NLA and Tigo, the courts ruled that the breach of the Lotto Act was a criminal offence which under the purview of the Attorney-General and not the NLA.
But NLA had also recently procured separate court injunctions on Airtel and Vodafone and stopped them from carrying on with similar 'text and win' promotions; the two telcos stopped those promotions, and had since not revived them.
In the case of MTN, the company is still running the 'Dream Big' promotion and giving out the daily GHS10,000 prizes, while pursuing the cases in court.
An NLA official described the ongoing legal tango with MTN and Gaming Commission as 'the final show down on the long argument between the NLA, Gaming Commission and telecom operators over who does and who does not have the right to authorize 'text and win' promotions by telecom operators.'
Meanwhile, MTN did not do any major games of chance last year due to many of such court cases involving other telcos; and that, according to MTN Ghana CEO, Michael Ikpoki accounted for the whopping 48% dip in MTN's SMS revenues for that year.
Story by Samuel Nii Narku Dowuona/Adom News/Ghana