Alexander’s Blog

Seemingly the most popular mobile marketing tool used in South Africa are competitions where you have to “sms keyword XYZ  to short code 0 00 00″. You are asked how many bears you see in a picture, you watched a TV program and must answer a question to win a “trip to paradise” or you simply have to sms your name to enter some kind of draw.

These campaigns work, no doubt, although they don’t do justice to what mobile marketing can achieve in terms of building Quality Leads TM. The bigger problem is that most of these campaigns are illegal.

Let’s backtrack. The Lotteries Act No 57 of 1997 (“the Act”) defines a lottery as “any game, scheme, arrangement, system, plan, competition or device for distributing prizes by lot or chance and any game, scheme, arrangement, system, plan, competition or device, which the Minister may by notice in the Gazette declare to be a lottery”. The legally appointed body to regulate lotteries in South Africa is the National Lotteries Board (“the Board”). 

According to the Board  a competition is an illegal lottery if participants send a sms or enter into the competition, without a specific product being promoted, e.g. “sms a number and you can win a car”. In addition, if participants are required to pay something to enter the competition, they should not pay more than the standard cost of the telephone call, sms or postage stamp.

Oops!

And you thought you can charge participants R10 premium sms rates even for texting “Stop” to opt out of a competition…

To make matters worse, Section 57 of the Act prescribes that “any person who participates in or conducts, facilitates, promotes or derives any benefit from a lottery and or a promotional competition (unless such lottery or promotional competition has been authorised by or under this Act or any other law) is guilty of an offence and may if convicted be liable to a fine or to imprisonment or both.” So not only do you commit an offence by offering an illegal lottery, but you also turn your target market into criminals by enticing them to participate.

Luckily we live in a Wild West scenario, where not only our politicians but also some companies “get away with murder”, so the chances that offenders are charged, brought to trial and prosecuted are almost zero. Apart from being ignorant of the law, this is the only explanation I can think of whenever I see a sms competition which is actually an illegal lottery in terms of the Act.

There is a silver lining however. Have you noticed that “Win iKhaya” has disappeared from SABC television broadcasts? Well, after many years of making money from the most desperate South Africans, the SABC was finally forced by the National Lotteries Board’s successful enforcement of the law to pull the plug on this illegal lottery.