Vodacom not yet in the clear

By Christelle du Toit, ITWeb senior journalist

Johannesburg, 20 Feb 2008

Vodacom has still not been cleared by the National Lotteries Board (NLB) for what the regulator considers to be an illegal lottery.

The cellular operator was issued with a cease-and-desist order by the NLB on Monday against its controversial "100 cars in 100 days" competition, which it complied with. However, it still went ahead with a mass draw of all the remaining cars on the following day, something the NLB is now taking up with the ministry of trade and industry.

Up to that stage, Vodacom had given away 88 BMWs to customers who were charged R10 an entry into the competition, some running up bills of hundreds of thousands of rands in the process.

According to Shameel Joosub, MD of Vodacom SA, the company still considers the BMW giveaway competition to be legal.

"As the promotional competition had almost reached the end of its cycle, Vodacom believed it is in all parties' interests to draw the promotion to a close," he said.

However, he confirmed Vodacom still went ahead with a mass draw of all remaining BMWs on the day after "stopping" the competition.

In addition, Joosub confirms the company's view that the NLB has no legal standing "remains unchanged".

"We do not believe the promotional competition [was] illegal," he says.

Sershan Naidoo, spokesman for the NLB, says the board would have to investigate the matter and could possibly end up taking the cellular operator to court, depending on what action its legal advisors recommend. Meanwhile, it has written to minister of trade and industry Mandisi Mpahlwa, requesting him to declare the competition illegal.

"The NLB is mandated by the minister to look into all illegal lotteries," he explains. "In order for a matter to be taken to court, the minister of trade and industry has to gazette that he believes the promotion to be an illegal lottery and then we can pursue it - it is really a matter of semantics [to say the NLB does not have legal standing] as we act on the authority of the minister."

He said that had Vodacom ceased all activity in the promotion on Monday, as it had indicated to the NLB it would, the matter would have been left there and no further action would have been taken.