“TATA ‘MA MILLIONS?’” THE ENFORCEABILITY OF A GAMBLING DEBT BETWEEN THE LOTTERY OPERATOR AND THE TICKET-HOLDER; AND THE ENFORCEABILITY OF A PARTNERSHIP AGREEMENT TO SHARE LOTTERY WINNINGS ALREADY PAID TO ONE OF THE PARTNERS

Abstract

The national statute, the Lotteries Act 57 of 1997 (hereinafter “the Act”) exclusively regulates lotteries and sports pools in South Africa (ss 44 and 104(1)(b)(i) read with schedule 4 part A of the Constitution of the Republic of South Africa, 1996 (hereinafter “the Constitution”). Since the implementation of the National Lottery, the “playing” of the National Lottery has become part of the weekly lives of South Africans. From its inception in March 2000 until March 2005 more than R3.4 billion has been generated for good causes
(National Lotteries Board Annual Report (2005) sourced electronically from http://www.nlb.org.za). The National Lottery is by far the best supported form of gambling in the country with a survey showing that more than 71% of participants had purchased a National Lottery ticket during the 12 months prior to the survey being conducted, whilst, for example, only 19% had participated in casino gaming (National Gambling Board Economic Impact of Legalised Gambling in South Africa (2003) Executive Summary 2). The National Lottery is however not the only form of lottery regulated in terms of the Act as it also provides for the regulation of societal and private lotteries, as well as promotional competitions (Part II of the Act). The aim of this note is to focus on two types of lotteries agreements. The first type of agreement relates to the question whether a lottery ticket-holder can enforce payment, arising from his winning ticket, from the operator in the courts: id est the enforceability of the gambling contract between the parties. The second type of lottery agreement deals with the enforceability of a partnership agreement inter partes, where the partners agreed to share lottery winnings, but where the receiver of the winning amount refuses to share it with his partner(s). The focus is on the partnership agreement, collateral or ancillary to the gambling contract. It is, for the purposes of this discussion, presumed that the lottery winnings have already been paid over to one of the partners. In each of the above two types of agreements under discussion, a distinction is made between an agreement arising from a licensed, and thus lawful, lottery on the one hand; and one arising from an illegal lottery,
conducted in contravention of the Lotteries Act, on the other hand. Section 57(1) of the Lotteries Act provides that any person who participates in, or conducts, facilitates, promotes or derives any benefit from a lottery is guilty of an offence unless it has been authorised by the Act or any other law. No other statute or law however authorises lotteries. It is thus illegal to participate, conduct, facilitate, promote or derive a benefit from an unregulated lottery. From the outset it should be noted that the common law, and most of the jurisprudence relating to gambling contracts, focuses on the fact that lawful gambling contracts were regarded as natural obligations and unenforceable as a matter of public policy. This note does not deal with such lawful, yet unenforceable natural obligations. It is submitted that these unenforceable contracts are irrelevant in the lottery scenario as a result of section 57(1).