The national Lotteries Board is investigating the legality of SMS-based competitions, including MTN’s 15-year celebration and e.tv’s Game Time.
Sershan Naidoo, the regulator’s spokesman, said yesterday that the board had received complaints from consumers and had asked MTN to provide details on its competition.
“We want to establish how the winner is determined. If it’s through a draw or chance then it is an illegal lottery.”
The board banned a Vodacom competition a year ago and won a court case against WiniKhaya, which held its last dream home draw in February.
This month MTN launched a competition in celebration of its 15th anniversary. To enter, subscribers must send a text message costing R7.50. They must then answer a series of general knowledge questions costing a further R7.50 each.
One entrant, Mike Ferreira, spent R15 000 in one week in the contest, he told Business Report.
“This is nothing more than a revenue generating exercise and unsuspecting subscribers could be left in debt,” he said. Ferreira said MTN sent him an SMS after every correct answer encouraging him to keep on playing because he was “leading the game”.
Another MTN customer who spoke on condition of anonymity said she would not be surprised if MTN recouped all the money it spent on the luxury prizes through the money made from the entries.
MTN said it had ensured that the “skills-based game” was fully compliant with the Lottery Act.
“This is a game of substantial skill and therefore does not require permission to be sought from the lottery board. We have sought legal advice and are confident that we are not in breach of the lottery regulations,” the company said.
MTN insists that the competition was not a draw and that players won according to points accumulated in a particular game. It had been transparent about the cost of each SMS and sent users regular updates to ensure that they were aware of how much they had spent on the competition.
Ferreira disputed this, saying he had received only one SMS alerting him to how much he had spent. The other player said she had never received an SMS alerting her to the costs.
Naidoo said that other SMS competitions were being investigated by the lotteries board, including e.tv’s Game Time, which charged R7.50 an SMS.
Last year the board forced Vodacom to cease its competition, in which subscribers were required to answer questions by text message for R10 each to win a BMW.
Some subscribers ran up bills of more than R50 000 in this competition.
Although Vodacom did not reveal how much it made from the promotion, it is understood that the figure could have exceeded R50 million.
SMS competitions – give your views