National Lottery Act

This Act may be cited as the National Lottery Act, 2023.

Section 2 provides definitions of key terms used in the Act (for example “Board”, “Cabinet Secretary”, “child”, “Fund”, “good causes”, “National Lottery”, “operator”, “prize”, “regulatory authority”, “ticket”, and “winning”).

Establishes a National Lottery to pool additional resources to be directed to good causes.

The Board may set up committees to help perform its functions, but no more than four committees may be established under this section.

Members of the Board are entitled to be paid allowances and disbursements for expenses, subject to approval by the Cabinet Secretary on the advice of the Salaries and Remuneration Commission.

The Board must appoint a Chief Executive Officer through an open, transparent and competitive process; the CEO must meet specified qualifications, perform listed management duties, and serves a three-year term eligible for one re-appointment.

The Board must competitively recruit a person qualified to serve as the Corporation Secretary; the Corporation Secretary must perform duties set out by the Board including providing guidance on duties, ensuring the Board follows procedures and complies with laws and regulations, preparing work plans and assisting the Chairperson to organise Board activities and meetings, issuing and circulating notices and papers, keeping records (attendance, seal usage, appointment documents, conflicts of interest), taking and circulating minutes, preparing annual meetings, and performing other duties the Board may direct.

The Board may appoint professional, technical and administrative staff it considers necessary and may determine their terms and conditions on the advice of the Salaries and Remuneration Commission.

The Board may, by resolution, delegate its powers, functions or duties to a committee or to any member, officer, employee or agent of the Board.

The common seal must be kept by the Corporation Secretary; it must be authenticated by the Chairperson or the Chief Executive Officer (and the Board must nominate a member to authenticate in their absence); the seal must not be used except on the Board's order; when affixed and authenticated it is judicially and officially noticed.

Parliament may appropriate monies for the purposes of the Board.

The Board's financial year is the twelve‑month period ending on 30 June each year.

The Board must prepare annual revenue and expenditure estimates at least three months before each financial year and include specified items (salaries, pensions, maintenance, repairs, allowances, reserve funds).

The Board must keep proper books and records of accounts relating to its income, expenditure, assets and liabilities.

The Board must prepare quarterly and annual financial and non-financial reports in the format prescribed by the Public Sector Accounting Standards Board and submit them to the National Treasury and the Auditor General; the Board must also continuously monitor and report performance quarterly and include a summary in its annual report following an outcome-based performance framework developed by the national government.

Establishes the National Lottery Board and grants it powers including acquiring and disposing of property, borrowing money, entering contracts, suing and being sued, and performing other acts necessary to carry out its functions; headquarters are in Nairobi with ability to open other offices.

Section sets composition of the Board, who appoints some members, appointment safeguards to ensure gender and regional balance, qualifications for members, disqualifications, CEO as ex‑officio member, and term length with one reappointment.

The Cabinet Secretary must ensure any vacancy on the Board is filled as soon as practicable in accordance with the Act.

Section 7 assigns functions to the Board (supervision, fraud prevention, policy recommendations, advising the Cabinet Secretary and National Government, and other tasks), allows the Board to operate the National Lottery (including by collaboration or procurement), and provides that losses from such collaborations are not to be compensated by the State or the National Lottery Fund.

The Board shall have the powers necessary for the performance of its functions under this Act.

Subject to the Schedule, the Board must regulate its own procedure; the procedure for conducting the Board's business shall be as provided in the Schedule.

Establishes a National Lottery for raising resources for specified good causes; the Board may operate additional games or enter partnerships (with Cabinet Secretary consultation) but losses from those activities must not be compensated by the State or the National Lottery Fund.

The National Lottery is exempt from written-law provisions regulating public lotteries for charitable, sporting and entertainment purposes.

The Board may procure an operator to run the National Lottery and may require payment for documents; the Board must satisfy itself about applicants' fitness and must commence procurement two years before licence expiry; operators seeking extensions must commence at least two years before their agreement expires.

The regulatory authority must, upon prescribed application and payment of the prescribed fee, issue one licence authorizing the Board or the person procured under section 24 to operate a National Lottery.

The regulatory authority may extend a seven‑year licence by up to three more years (so total does not exceed ten) if done at least two years before expiry; the operator has no rights or legitimate expectations of extension beyond what this section provides; listed grounds at subsection (2) relate to extension considerations.

Theoperator must ensure compliance with requirements that the regulatory authority may determine or impose from time to time.

Requires that the National Lottery be run and promoted with propriety and according to law; protects participants' interests; requires maximising net proceeds; and requires adopting strategic inclusive frameworks for responsible gambling and conduct of the national lottery.

The regulatory authority may vary the conditions of a National Lottery licence, including imposing or reducing conditions; when intending to vary it must serve notice specifying grounds and give the operator 14 days to give reasons after service and ensure notice is served at least 21 days before the intended variation; failure by the operator to give reasons within the period causes the licence to be deemed varied.

Section 30(1) lists factual grounds related to contraventions of National Lottery licence conditions; Section 30(2) states that the operator's liability to pay money under the Act remains despite a licence ceasing to be valid.

A National Lottery licence may be revoked where the operator or the operator's representative has grossly violated the provisions of the Act.

The regulatory authority must notify the Board and operator in writing of grounds for licence revocation, require the operator to give reasons within fourteen days, may hold oral hearings or decide to revoke, must inform parties of the licence end date if it ceases to be valid, and must notify the public when it revokes a licence.

The regulatory authority may order suspension of a National Lottery licence after giving notice and an opportunity to be heard; if it suspends a licence it must inform the public and must inform the operator and the Board in writing of the suspension date.

The operator may conduct National Lottery games with Board and regulatory authority approval; the regulatory authority, in consultation with the Board, must prescribe guidelines, policies and procedures for conducting National Lottery games, including specified items such as types of games, ticket validation, prize payment, frequency, sales methods, draws, ticket requirements and other necessary guidelines.

Operators must print tickets with approved imprint and logo; the regulatory authority issues purchase guidelines; operators may authorize agents (with approval) and determine ticket form and prize in consultation with the Board; unauthorised sellers commit an offence with fines or imprisonment.

Lists persons who are prohibited from participating in the National Lottery and requires the operator to verify identity and age to prevent child participation.

It is an offence for any person to allow someone prohibited to participate in an unauthorized lottery; on conviction the offender may be fined up to five million shillings or imprisoned up to five years or both. If a winning ticket falls under subsection (2) the owner is not entitled to the prize, and prizes so awarded must be returned to the operator within one month; if not returned the operator may recover the prize or its value by civil suit.

If a partnership, disclosure covers all the general and limited partners.

Requires the operator and the regulatory authority to run and oversee public lottery draws: the operator conducts draws with regulatory approval; the regulatory authority determines and publishes winning numbers; an officer supervises selection; equipment must be tested by the authority with the operator's auditor; the operator must adopt rules and a ticket‑validation system.

Section 40(2) says the operator is discharged from liability to winners upon payment of prizes according to the lottery's terms; Section 40(3) allows the operator to arrange payment by agents under conditions the operator may specify.

Section 41 sets rules about prizes and tickets: the operator must pay prizes within seven days of a draw, keep a register of surrendered prizes, is not responsible for lost or stolen tickets; lost-ticket reporters must report before a draw and may claim a prize if the reported lost ticket wins subject to operator conditions.

The regulatory authority may appoint a qualified person to audit the National Lottery; that appointee may enter operator premises, access and inspect lottery tickets and records and take copies; directors and employees must provide information; failure to comply or obstructing the appointee is an offence with specified fines or imprisonment.

Sets how National Lottery proceeds are apportioned, caps administrative costs for the regulator and Board at three per cent of gross revenue, requires Cabinet Secretary for finance approval for those costs, and requires the operator to pay monies to the Fund weekly or as the Board determines earlier.

Section 44 establishes the National Lottery Fund, requires the Fund to retain and disburse National Lottery proceeds, lists sources of the Fund's monies, directs the Board to apportion proceeds to specified good causes (with consultation and Cabinet Secretary approval) at least six months before the next financial year, and permits the Cabinet Secretary to make regulations prescribing additional criteria.

The Board is responsible for administering the National Lottery Fund and must carry out specified duties including approving accounts, determining allocations, approving investments and disbursements, managing assets, receiving donations, advising the Cabinet Secretary, limiting administrative expenses to three per centum, and ensuring equitable distribution.

The Board must, through regular publications, inform the public about its activities and operations and ensure those activities and operations are accessible to the public.

Section 47 assigns the Chief Executive Officer of the Board as Administrator of the National Lottery Fund and lists the Administrator's responsibilities, including running day-to-day affairs, opening Board- and National Treasury-approved bank accounts, keeping accounts and records, custodianship of assets, maintaining beneficiary registers, preparing and submitting statements and reports, outsourcing and contracting with Board approval, and maintaining purchaser saving accounts.

Certain entities are eligible to access the Fund; persons or institutions that are not tax compliant are ineligible; institutions whose officials lack prior clearance are ineligible.

The financial year of the Fund is the twelve-month period ending on 30 June each year.

The Administrator may, with the Board's approval, invest any of the Fund's monies that are not immediately required and subject to the Public Finance Management Act (Cap. 412A).

The Fund must retain all receipts, earnings and accruals to the Fund, and the balance of the Fund at the close of each financial year, for the purpose for which the Fund is established.

Misappropriating the Fund's monies or assets (or assisting others to do so) is an offence punishable on conviction by a fine up to ten million shillings, imprisonment up to ten years, or both.