KGL’s “big payments” are the price of state-backed monopoly, not heroism

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KGL’s “big payments” are the price of state-backed monopoly, not heroism

This week, media reports emerged of KGL paying GH¢173 million to the National Lottery Authority (NLA) and as usual, the payment was dressed up as a story of exceptional corporate effort. To add spices to the hype, the reports said KGL’s payments were over three times higher than the combined amount paid by the 29 other licensed lotto operators. 

That erroneous comparison was conjured to help make the point that KGL as a single company is contributing more to the state kitty than the 29 others, owing to its exceptional ingenuity. 

But you and I know it is not because of any ingenuity. Those payments are a fraction of the predictable earnings from occupying the most lucrative segment of a state-engineered market. And if the state cared, it would have been asking if these payments and the hype behind them are all that there is to a monopoly that stifle competition and undermines customer choices? But that is for another day.

Monopoly over USSD

The key thing though is that KGL did not outcompete anybody or the field. It was handed Ghana’s golden cow in the lottery business that allows it monopolistic control over the USSD and digital lottery channels. 

In its current position, KGL, without moving a needle, has access to rapidly growing revenues. The structure allows its costs to remain low, while the company’s  margins are structurally high, giving it supernormal profits that other Ghanaian companies working harder do not get even half.

That advantage is not the product of innovation or risk-taking. It is a product of regulatory design. And one would have thought, in keeping with the proverbial wisdom, that “the one whose palm kernels are cracked for him by the spirits does not boast of how hard they are to chew.” 

But here we are, bombarded on daily basis by the narrative that suggests otherwise. KGL’s position does not reflect exceptional exertion, but the comfort of a system where market access, scale, and returns have effectively been pre-arranged, making its success less a triumph of enterprise and more a function of privilege. Which business, when granted monopoly in a lucrative business line like it has will not make millions in profits? Perhaps, others would have paid millions more in revenues and supported the sector to grow in a way that endures for all, not glorify one privileged entity.

Taxes not bonuses 

Another key thing worth stating is that the taxes KGL, as well as other firms in the country pay are not generosity, neither are they sacrifices. 

Tax payments are not a “cross” to be borne as they are the state’s lawful share of economic rents created by public policy. Anything else is narrative management and public relations gimmicks, which we have seen enough.

According to the publications, KGL contributes nearly four times the combined payments of 29 other licensed operators. As said earlier, this is not evidence of superior efficiency but evidence of a deep structural imbalance.

You cannot have one player controlling the most valuable channel and then celebrate its dominance as if it emerged from fair competition.

Global standards 

Across other jurisdictions, lottery, like other business systems are deliberately structured to avoid exactly this kind of concentration of advantage.

In the United Kingdom, for example, the right to operate the National Lottery is not handed out arbitrarily. It is subjected to a rigorous, transparent competitive tender process, with multiple bidders assessed against strict financial, technical and public interest criteria. 

The licence itself is time-bound and periodically re-competed to ensure continued efficiency, innovation, and public value. 

In the European Union, courts have emphasized that even where lotteries operate under monopoly structures, licences must be granted through open, fair and competitive processes. Failure to do so can amount to unlawful state aid. 

In Ukraine, reforms are explicitly moving in this direction, with the government launching open tenders for lottery licences precisely to improve transparency, expand participation, and eliminate opaque allocations. 

In the United States, while lotteries are state-owned, private firms operate only as contracted vendors or managers under layered oversight, with commissions, legislatures, and multi-actor governance structures ensuring no single firm captures the entire value chain. 

Even in systems with private sector participation, the logic is consistently that the state retains control of the platform, market access is structured and contestable and no single firm is allowed to dominate the most profitable distribution channel without checks/

Why is Ghana’s different?

Over concentration

Against the international benchmark explained above, Ghana’s lottery ecosystem stands out, not for efficiency, but for concentrated privilege that has benefited a few while the industry remains underdeveloped and customers bearing the brunt of a monopoly.

KGL’s control over the USSD channel, the most scalable, accessible and profitable platform in today’s lottery economy, effectively tilts the entire playing field.

Other operators exist, yes. But they operate on the margins of a system where the core value driver has already been allocated.

That is why 29 firms combined generate less than a third of what KGL alone produces.

When examined in truth, one realizes this arrangement is not competition, as KGL has sort to portray it. Rather, it is confinement.

The result is that the current structure discourages new entrants, who know the most valuable channel is out of reach and stifles innovation, because dominance reduces the need to improve. It also concentrates risk, leaving the state dependent on one player’s continued performance, compliance I daresay dictates.

In economic terms, this is a rent-extraction system, not a dynamic market and it is gladdening to hear that the government, through the venerable Attorney General and Minister for Justice, Dr Dominic Akuritinga Ayine, is making moves to dismantle the ecosystem that was deliberated created and sustained to benefit just one individual.

With NDC, a social democratic party in power and the pro-competition Dr Ayine as the government’s legal advisor, Ghana has the best chance to shone light on a sector that has the potential to rake in billions in revenues and stimulate economic development. 

Doing that will standardize Ghana’s lottery and align the sector with global best practices.

While we wait for that KGL ought to be reminded, rather loudly that paying taxes is not heroism. It is the bare minimum, especially by a company enjoying undeserved monopoly.


Source: Patrick Yao Wemegah