GHANA’S Government is considering a sports lottery to help establish a National Sports Development Fund.
The Ministry of Youth and Sports are holding a stakeholders forum on Thursday to discuss an initiative for government funding, according to the Modern Ghana.
The fund was proposed as an alternative funding option at the 2018 Budget and supported by the finance ministry.
There have been several revenue sources considered as a source for the fund, including a sports lottery and taxing Ghanaian sportsbooks.
Public relations officer of the Sports Ministry, Elvis Adjei Baah, said the government is considering a sports lottery due to its success in other countries, including Kenya.
However, the country already tried a sports lottery, known as the National Lottery Authority’s Soccer Cash, which the Deputy Sports Minister, Pius Enam Hadzide, labelled a disaster.
Hadzide recently revealed that the sports lottery, initiated by the last government under the Mahama Ayariga-led administration, left more than GH1 million in debt.
The lottery was introduced to raise revenue for basic sports infrastructure and promote local leagues, as well as sports in schools.
Hadzide said the current government hasn’t made any money from the lottery and has been left with advertising expenses.
But there has also been talks of generating revenue by taxing sports betting companies in the country.
“There has been a lot of talk on sources of funding for the fund, and taxing is one thing that has been discussed,” Baah said.
“If you look at the activities of the sports betting companies, they could be a major contributor to the fund.
“There have been discussions on taxation of these companies, so we will see what will happen.”
However, sports betting companies in Ghana already pay a high tax rate of almost 18 percent and increasing it could have a similar response as the Kenyan tax hike did.
Earlier this year, the Kenyan Treasury Secretary, Henry Rotich, proposed a 50 percent tax hike on all gambling operators. Lottery owners and bookmakers responded with legal challenges and threatened to pull sponsorship deals.
Instead of the 50 percent tax, President Uhuru Kenyatta signed a uniform 35 percent tax into law which caused prominent sportsbook Sportspesa to cut sporting sponsorships in the country. The company also filed a lawsuit against the President, arguing that he overstepped his mandate.
It’s not clear if Ghana’s betting companies, such as Mybet sportsbook, will have the same reaction if the government looks to increase tax rates.
Regardless, Baah said that the Fund will come to fruition even if it takes some time.
“It is difficult to put timelines on it because some of the proposals will have to go through legal, and in some cases, parliamentary procedures,” he said.
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