Firstrand Bank Limited v National Lotteries Board

Firstrand Bank Limited introduced a savings product known as the “Million-a-Month Account”, a 32‑day call deposit account paying nominal interest. For every R100 standing to the credit of the account on a specified monthly date, depositors received an entry into a monthly random draw for cash prizes, including a prize of R1 million. The National Lotteries Board contended that this scheme constituted a prohibited lottery under the Lotteries Act 57 of 1997. It applied to the Pretoria High Court for a declaratory order and interdict, which were granted. Firstrand Bank appealed to the Supreme Court of Appeal, arguing that the scheme lacked a ‘subscription’ because depositors did not risk losing their capital.

The appeal was dismissed with costs, including the costs of two counsel.

This decision is a leading authority on the interpretation of ‘lottery’, ‘subscription’ and ‘stake’ under the Lotteries Act 57 of 1997. It confirms that schemes offering prizes by chance in return for the temporary use or possession of money can constitute prohibited lotteries, even where capital is not at risk. The case curtailed prize-linked savings schemes in South Africa and clarified the enforcement powers of the National Lotteries Board.