Lottery licence: 'All will be revealed in good time,' says minister
The minister filed an opposing affidavit in the application over the Easter weekend.
The matter had been set down to be heard in the Pretoria High Court on Tuesday, 22 April, but will now be heard on 5 and 6 May.
Wina Njalo, a subsidiary of Hosken Consolidated Investments, wants the court to declare unconstitutional and unlawful Tau's failure to award the fourth licence. It is seeking an order directing him to announce the successful bidder before 9 May and to conclude a licence agreement by 31 May.
Wina Njalo is also challenging the Minister's decision to extend the bid validity period for the fourth licence and wants to set aside his decision to issue a temporary licence (for one year). A temporary licence, says Wina Njalo,will only benefit the present licence holder Ithuba, because only it has the capability and infrastructure to run the lottery, at short notice.
However, Tau says he cannot give an 'unequivocal undertaking' to conclude the licence agreement by 28 May, because of possible unforeseen circumstances, and if he were bound by the court order 'I may be forced to accept unfavourable terms and conditions'.
'This cannot be in the public interest,' he said.
'If I am unable to conclude a satisfactory licence agreement by 31 May, then it will be necessary to either extend the bid validity period or cancel the RFP [request for proposals] and begin anew. I would prefer to avoid the latter.'
He said the licence process was 'extremely complex'.
'In the past, serious allegations of corruption were made in respect of the National Lotteries Commission and the way the lottery was managed. These considerations prompted me to take a very cautious approach.'
He said allegations that he was favouring Ithuba (through the issue of the temporary licence) were not true.
'It may well be that Ithuba has an advantage over other potential bidders. I did not know it then and do not know it now.'
However, if Wina Njalo was successful in having the decision to issue the licence set aside, then the lottery would become 'entirely dysfunctional' on 1 June, and the charities which relied on it for funding would suffer.
He said the issue of the temporary licence was a 'contingency measure'.
The minister said the crux of Wina Njalo's grievance appeared to be a demand for the precise reasons underpinning his decision to defer the announcement of the winning bidder.
However, he said, he had identified 'issues' which had to stay confidential to safeguard the integrity of the ongoing adjudication process.
'It is a matter of public record that the award of previous licences was fraught with allegations of corruption and illegality. I fully understand my obligation to furnish reasons for my decision and will do so in due course, after I have announced the winning bid.
'All will be revealed in good time, when it cannot influence the decision-making process.
'I have honestly and earnestly sought to distance myself from any previous history and to properly and effectively apply my mind to the proper issuing of the fourth licence. The fact that I invited all bidders to apply for the temporary licence was an earnest attempt to involve them all.'
The National Lotteries Commission (NLC) is also opposing the application.
In his affidavit, the chair of the board, Barney Pityana said the evaluation process had to be extended because the NLC had received eight applications instead of an expected four.
The process involved site visits to technology partners 'around the globe'.
He said after the adjudication process had been finalised and the board had reported to the Minister, Tau's advisers had commenced their work. At a meeting in December 2024, the Minister had advised that he was not ready to reach a decision.
In January, when the board resumed its work, it was advised that there was not sufficient time for the selection of a successful bidder, the negotiation of a licence agreement and the transition required for the successful bidder to take over the lottery operations by 1 June 2025.
The transition period alone takes between five to six months, he said, hence the recommendation to the Minister to issue the temporary licence and the invitation to the eight bidders to apply for it.
He said the provisions of the temporary RFP, published on 3 March, made it financially viable and attractive for all the bidders.
He described Wina Njalo's claims that Ithuba was being favoured as a 'grand conspiracy' which it had not even come close to proving.
Pityana said the NLC had reserves of more than R2.6-billion, but if no temporary licence was awarded, more than a third of that would have to be spent to fund good causes for 12 months.
'It is also worth mentioning that the minister is contemplating a possible transition to a State Lottery after the expiry of the fourth licence. The reserves will be required to conduct research for the development of a central gaming system and to capacitate an organ of state to operate the next lottery,' he said.
Ithuba Lottery is one of the eight bidders. It claims it is a separate legal entity to the present licence holder Ithuba Holdings, although in its opposing affidavit (to the setting aside of the temporary licence), Ithuba Lottery acknowledges that if it gets the temporary licence, it intends to take over Ithuba Holdings and the assets of Ithuba Holdings' technology partner, to operate the licence.
While Wina Njalo claims that the companies are one and the same because they share directors, have similar names and share premises, Ithuba Lottery says it has a different shareholding structure to Ithuba Holdings.
This article first appeared on GroundUp. Read the original article here.
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