We laud the Federal government’s plan to eliminate illegal lottery operators, especially those involved in Ponzi schemes from the country. The Permanent Secretary for Special Duties in the office of the Secretary to the Government of the Federation, Mr. Festus Dauda, disclosed this to journalists in Abuja after a two-day specialised training organised for members of the National Lottery Regulatory Commission.
He also revealed that many people fall victims of the Ponzi scammers because many Nigerians regarded lottery as gambling. According to him, the game became popular with sports betting and promotion activities embarked upon by manufacturers and mobile network service providers.
Due to the fraudulent activities of the illegal lottery operators, the government has empowered the regulatory commission with modern technology to apprehend all illegal operators and quacks and prosecute them. The government’s plan to ensure that the illegal operators and quacks in the industry are eliminated is a good development.
We believe that the initiative will reposition lottery to its rightful place and enable government tap from the gains in the industry. It is sad that the government is losing billions of naira to the illegal operators. Therefore, it is commendable that the Director-General of the NLRC, Mr. Lanre Gbajabiamila, has stated the commission’s readiness to enforce the laws guiding lottery in the country.
We welcome the new plan to sanitise the industry so that the Ponzi scheme scammers will not continue to defraud Nigerians. We recall that many Nigerians had fallen victims to these Ponzi schemes. In March 2017, the Nigeria Deposit Insurance Commission (NDIC) revealed that Nigerians lost N18billion to the MMM scheme in 2016.
MMM was a Russian company that perpetrated one of the world’s largest Ponzi schemes of all time, in the 1990s. It was launched in Nigeria in 2016. The scheme had over three million participants before the organisers suspended payment to investors. Also, recently, the Economic and Financial Crimes Commission (EFCC) recovered over N200 million from another ponzi scheme, the Swiss Golden investment.
This was after the commission received petitions from many complainants that invested in the fraudulent scheme without receiving the profits or recovering their capital. Altogether about seven ponzi schemes had operated in Nigeria in the last five years. These schemes operate like wonder banks and are not regulated.
Despite the disappointments associated with the ponzi schemes, they are still popular in the country. Notwithstanding the crash of the MMM ponzi scheme, others such as Twinkar, Ultimate Cycler, Pennywise and Help Colony enjoyed commensurate patronage. There is no doubt that ponzi schemes are fueled by the greed and high expectations of those that patronise them.
We urge Nigerians to be wary of fraudulent investments, especially those which promise high returns. They should be circumspect in investing in any scheme. They should avoid doubtful investments, especially those from ponzi schemes, unregistered companies and those without fixed address.
Some financial experts have attributed high patronage of the ponzi schemes to the prevailing economic hardship in the country. Government should diversify the economy and attract more foreign investments. It should also create more awareness on the activities of the ponzi schemes and genuine lottery operators.
Interestingly, the National Communication Commission (NCC) has been ordered to shut down the illegal lottery operators. While applauding the initiative, we urge the government to ensure that only genuine ones are allowed to operate. Government should make sure that illegal lottery operators are apprehended and prosecuted as it promised. Those found guilty must be given condign punishment.
The proliferation of illegal lottery operators in the country is condemnable. The government should create more jobs so that it can reduce the patronage of these ponzi schemes by Nigerians. The loss of over N1 trillion to the scheme annually is mind-boggling.
We urge the NLRC to enlist the services of the Central Bank of Nigeria (CBN) to monitor the payment settlement in the lottery industry. The NCC should ban illegal lottery and gambling activities on all GSM networks. There are fears that the proceeds of illegal lottery operation may be used for money laundering and terrorism.