Games of Chance in Ethiopia: Who May Operate Them and the Criminal Liability for Operating Without a Permit

Ethiopian law treats games of chance as a regulated activity that is partly reserved to the State and otherwise open only to those who hold a permit. The framework consists of the National Lottery Administration Re-establishment Proclamation No. 535/2007; Council of Ministers Regulation No. 160/2009, which re-established the National Lottery Administration (the “Administration”) as an autonomous federal agency with its own legal personality; and the Illegal Lottery Activities Monitoring and Control Directive No. 141/2013. The Administration has a dual mandate: to generate revenue through lottery activities and to supervise lottery activities, which includes issuing, renewing, suspending and revoking permits and controlling illegal lotteries. As Kiya & Associates Law Office, we have prepared this note to explain who may lawfully operate games of chance and what follows for those who do not.

What Counts as a Game of Chance?

“Lottery” means any game or activity in which the prize winner is determined by chance, drawing of lots or any other means, and it expressly includes tombola or raffle, lotto, toto, instant lottery, number lottery, multiple prize lottery, promotional lottery, bingo, sport betting lottery and other similar activities. The definition is open-ended, so a game missing from the list is still a lottery if chance decides the winner. “Lottery activity” is equally wide: it covers the preparation of any lottery inside or outside the country and the distribution, sale, drawing of lots or any similar activity inside the country, so the sale or drawing in Ethiopia of a lottery prepared abroad is a lottery activity. Promotional lotteries, which use lots hidden in product packaging, or luck coupons and cards distributed with the sale of goods or services, with prizes in kind, are lotteries like any other. The Directive confirms that chance-based marketing schemes, quiz and answer competitions with prizes, and gift schemes run by any means are subject to the Administration's control.

Who May Operate Games of Chance?

The law creates three categories. First, the State. The Administration alone has the right to undertake lotto, toto, instant lottery, number lottery, multiple prize lottery and modern bingo, and no private person can obtain a permit for any of them. The only private participation the law allows is in lotto and toto, which the Administration may run with joint venture partners that have the requisite capital, technology, know-how and managerial competence, after obtaining the authorization of the supervising authority.

Second, any person on permit. Tombola or raffle, sport betting lottery, conventional bingo and promotional lottery may be undertaken by any natural or juridical person who holds a permit from the Administration. The applicant files the prescribed form with the necessary evidence, and the Administration issues the permit once the application is complete and the conditions set by directive are met. The Directive adds a social-contribution condition: the net proceeds of a tombola or raffle must go wholly to social services, 20% of the net proceeds of a sport betting lottery and 51% of the net proceeds of a conventional bingo must go the same way, and evidence of this must be submitted before the permit is issued. The Directive attaches no such condition to promotional lotteries, which any person may run after taking out a permit.

Third, everything else is prohibited. The Directive classifies every game of chance outside the permitted categories as prohibited, and the Proclamation bars any person from undertaking a lottery activity without a permit. The Administration is also directed to prevent chance-based activities from being run through internet technology, call centres, mobile telephones or any other means without authority.

Renaming a game does not take it outside the law. The statutory definition of lottery looks at what the game does, not at what it is called: if the prize winner is determined by chance, drawing of lots or any other means, it is a lottery, whether it is marketed as a giveaway, lucky draw, quiz, prediction contest, loyalty reward or gift scheme. The Directive places chance-based marketing schemes, quiz and answer competitions and gift schemes under the Administration's control, so a relabelled game that was never permitted remains an unauthorised lottery activity under Article 17(1) of the Proclamation and the Regulation.

Holding and Keeping a Permit

A permit cannot be transferred to another person without the Administration's consent. A permit running for more than a year is renewed at the beginning of each fiscal year, on an application filed at least one month before the end of the budget year for which it was issued, and the Administration must decide within thirty days unless a ground for suspension or revocation exists. Permit fees are set by directive. In addition, the permit holder pays a commission of 15% calculated on the forecast total revenue from ticket sales (tombola and sport betting), on the total value of the products or services allocated for prizes including income tax (promotional lottery), or on total periodic revenue (conventional bingo and other lotteries). Failure to pay the periodic commission on time attracts a fine of 20% for each month of delay, capped at 100% of the outstanding commission.

The Administration may suspend a permit until corrective action is taken where the holder breaches the law or acts outside the permit. It may revoke a permit that was obtained with false documents or declarations, transferred without consent, used to commit a criminal act against public peace and order or national security or any fraud, left uncorrected after suspension, or allowed to lapse, and where the holder ceases business or becomes bankrupt. Before suspending or revoking, it must give written notice of its reasons and seven days to respond, and the holder may appeal to the supervising authority.

Criminal Liability

Article 789(1) of the Criminal Code of 2004 (Proclamation No. 414/2004) punishes with fine or arrest any person who publicly organises lotteries, professional betting or gambling for profit without authorisation from the competent authority. It also covers organising for profit, in a public place, a place open to the public or a private club, any gambling, betting or other officially prohibited game of chance, or taking part in such games, and otherwise contravening the relevant laws, regulations or directives. The only carve-out, in Article 789(2), is for lotteries and games of chance permitted by law and organised for public or charitable purposes, so a charitable purpose does not replace the permit. Ignorance or mistake of law is no defence under Article 81(1), the special lottery laws apply alongside the Code under Article 3, and where a company is punished, the personal liability of its officials and employees remains under Article 34(3).

Unless the act attracts a heavier penalty under the Criminal Law, any person who undertakes a lottery activity without a valid permit is punishable with a fine of Birr 50,000 to 100,000 and imprisonment of three to five years. Any person who leases or otherwise authorises the use of premises for the purpose of an illegal lottery, or who prevents or obstructs the Administration's inspector from entering premises or carrying out an inspection, is punishable with a fine of Birr 10,000 to 20,000 and imprisonment of one to two years. Because “person” includes juridical persons, these provisions reach companies as well as individuals, and property owners who let premises for illegal gaming are exposed even where they do not run the game themselves.

Enforcement is built into the framework. The Administration may order any unauthorised lottery activity to stop and must report the offender to the competent organs for prosecution. With a court search warrant, it may enter any premises at any convenient time. Under the Directive, control staff gather evidence on persons found running illegal games and report to the Administration within twenty-four hours, its legal affairs follow-up unit sees that cases are brought, and legal action taken against illegal operators is publicised so that others take note.

What This Means Going Forward

A business that runs a prize draw, coupon or scratch scheme, SMS raffle, prize quiz or sales-linked gift scheme needs a promotional lottery permit before launch and should budget the 15% commission on prize value as a cost of the campaign. Organisations running tombola or raffle fundraisers need a permit and must commit the net proceeds to social services. Anyone wishing to run lotto, toto, instant, number, multiple prize or modern bingo games cannot be licensed and may take part only through a joint venture with the Administration. Property owners should not let premises for gaming without sight of a valid permit. Prize winnings are subject to 20% withholding under the Income Tax (Amendment) Proclamation No. 1395/2025.

This article is provided for general informational purposes only and does not constitute legal advice. For guidance specific to your circumstances, please contact Kiya & Associates Law Office.