First National Bank Competition Illegal Under Lotteries Act

March 31 - Has one of South Africa's most prestigious financial institutions, First National Bank, been  partaking in illegal gambling activities? So says the country's Supreme Court of Appeal who ruled that the bank's innovative "Million-a-Month Account" competition was not legal under the country's Lotteries Act.

The Million-a-Month Account competition, also known as MaMa, requires that customers invest R100 in a 32-day-notice fixed savings account. In return, they stand in line to win R1-million.

At the end of the week, the Appeal's Court dismissed First National Bank's appeal against a Pretoria high court who declared that the competition should be halted immediately because it constituted gambling.

Robert Keip, CEO for Savings and Investment Products at First National Bank said after the ruling, "We obviously respect the judgment and obviously are disappointed that our attempts to try and come up with an innovative savings product was interpreted as being fully foul of the Act."

First National Bank believed that since no money was given over, except as a saving's account, the competition did not really fall foul of the law. Keip continued: "The point that we argued that there was no subscription in terms of the Lotteries Act, because nobody paid anything to take part in the lottery. The full capital that you put into the account came back to you, and therefore it was always your money. The route that the court took, they interpreted the word 'payment' which was in the Act, and they said the mere fact of putting money into the account constituted payment, and as a consequence, we fell into the Lotteries Act, and therefore it was an illegal lottery. The reason for that is that the National Lotteries Act really creates a statutory monopoly - that only the National Lotteries Board can run a lottery in this country."

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