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Daily Maverick
a day ago
- Business
- Daily Maverick
Troubling questions after Minister Tau gives Ithuba another year to run National Lottery
On the face of it, Ithuba should have been excluded, as it did not bid for the new permanent licence and it has reached the maximum legal operating limit of 10 years. Minister Parks Tau has granted a controversial 12-month National Lottery extension as an 'emergency' temporary licence to Ithuba Holdings to run the National Lottery. This extends Ithuba's operations to 11 years despite the legal limit being 10 years maximum. Tau's decision comes despite two court judgments that found that the temporary licence tender process was unfair and favouring Ithuba. Ithuba should also have been excluded as it had not bid for the new permanent licence. The minister responsible for the National Lottery has awarded an 'emergency' 12-month temporary licence to Ithuba Holdings, the company that has operated the National Lottery for the past 10 years. The awarding of the temporary licence was made just hours before Ithuba's contract ended at midnight on Saturday. According to the Lotteries Act, an operator's licence is valid for eight years but may be extended once for a maximum of two years. Ithuba's original licence, issued in 2015, was extended for two years in 2023 and ended this past Saturday. It is unclear on what grounds Trade, Industry and Competition Minister Parks Tau granted a further year to Ithuba Holdings. This means it will operate the National Lottery for 11 years, rather than the eight it was originally given when its licence was awarded. In terms of the Request for Proposals (RFP) for the temporary licence, only the eight consortiums that bid for the permanent licence could tender for the temporary one. Ithuba Holdings did not apply for the new operator licence. Instead, a sister company, Ithuba Lottery, with which it shares seven directors, a physical address and a website, applied. Tau's decision to award the temporary licence to Ithuba Holdings (and not Ithuba Lottery) raises several troubling questions. (Even choosing Ithuba Lottery would have been questionable, since they are only two different companies in a strict legal sense; practically they are the same company. The creation of Ithuba Lottery was, in effect, a sleight of hand.) Despite two damning court rulings, Tau has used Section 13B in a 2015 amendment of the Lotteries Act, which gives the minister wide powers to issue a temporary licence in certain circumstances. But that does not explain why he chose Ithuba Holdings, a company which, on the face of it, should have been excluded. Asked for the reason for Tau's decision, as well as other questions about the awarding of the temporary licence, his spokesperson, Yamkela Fanisi, said, 'Thank you, we are on it. We are faced with many media requests. We will revert.' He had not responded by the time of publication. Similar questions were also sent to National Lotteries Commission (NLC) board chairperson Barney Pityana, who had also not responded by the time of publication. Ticking clock A recent judgment set aside Tau's decisions to issue a RFP for a one-year temporary licence and to extend the bid validity of the main licence for another year. The court found that the tender was unfair as it favoured Ithuba, the only one that could deliver from 1 June. But the order by Judge Sulet Potterill declaring the temporary licence invalid was suspended for five months. This meant that the licence could still be granted, but only for five months, after which the new licence holder, the Sizekhaya Consortium, which has Goldrush Holdings as a major shareholder, would have to take over. The NLC then unsuccessfully applied to vary this judgment, which raised the prospect of the sale of National Lottery tickets being suspended at midnight on 1 June. The NLC's application, which was heard urgently on Thursday at the high court in Pretoria, was opposed by Wina Njalo, one of the companies that bid on the National Lottery licence tender. Wina Njalo is still considering its legal options. Tense negotiations The NLC had entered into negotiations with Ithuba Holdings to run the temporary licence. It is unclear why Ithuba Lottery dropped out and was replaced by the incumbent Ithuba Holdings (which are, for practical purposes, the same company). What followed were tense negotiations that were still ongoing on Saturday, with Ithuba sticking to its guns and arguing that it was not financially viable to run the temporary licence for five months, GroundUp was told. GroundUp was told on Saturday, as the clock ticked down to the midnight deadline for a temporary licence to be concluded, that the minister would issue a statement by noon. But several hours later, Ithuba had not signed the agreement that would ensure that ticket sales would not be disrupted. Had the negotiations been unsuccessful, the NLC recently told Parliament, there would be no disruption of grants as it had R4.3-billion in reserve to continue to fund worthy causes. Tau finally issued a statement after 6pm, with less than six hours to go, and the prospect of the National Lottery ticket sales being suspended looming. In the statement, Tau said: 'I am pleased to report that I have concluded, on advice of the [National Lotteries] Commission, successful negotiations with Ithuba Holdings (RF) (Pty) Ltd and have signed a Temporary Licence Agreement for them to operate the National Lottery and Sports Pool on a temporary basis for a period of 12 months with effect 01 June 2025. The Temporary Licence will ensure the continuation of the [National] Lottery operations in the period that transition is required from the Third to the Fourth Licence operations.' Tau also said he would appeal the NLC's failed appeal and quoted from the judgment by Judge Omphemetse Mooki to justify his decision. Mooki had said: 'It would be a surprise to the court that the Minister is unable to appoint an operator, on a temporary basis, for a whole year. This is more so because the Minister has more latitude in appointing a temporary operator, as opposed to a fully licensed operator.' Tau said, 'It is in the context of both the [earlier] 21 and [Mooki's] 30 May 2025 judgments that I received and accepted the advice from the Commission, that I appoint a temporary licence operator on an urgent basis.'
The Citizen
2 days ago
- Business
- The Citizen
Minister appoints Ithuba Holdings to run national lottery for 12 months
Trade, Industry and Competition Minister Parks Tau has appointed Ithuba Holdings (RF) (Pty) Ltd as the temporary national lottery and sports pool operator for 12 months. This as the minister on Wednesday announced the successful conclusion and appointment of Sizekhaya Holdings (RF) (Pty) Ltd ('Sizekhaya') as the fourth national lottery and sports pools operator. However, Sizekhaya's appointment takes effect on June 1, 2026. 'Sizekhaya's appointment takes effect on June 1, 2026, and requires that there be transition from the third national lottery and sports pools operations to the fourth national lottery and sports pool licence operations. 'On advice of the National Lotteries Commission, I also authorised that a temporary licensee must be appointed in terms of section 13B of the Lotteries Act, 1997. 'I am pleased to report that I have concluded, on advice of the commission, successful negotiations with Ithuba Holdings (RF) (Pty) Ltd and have signed a temporary licence agreement for them to operate the National Lottery and Sports Pool for a period of 12 months with effect June 1, 2025,' said the minister in a statement on Saturday. The temporary licence will ensure the continuation of the lottery operations in the period the transition is required from the third to the fourth licence operations. In addition, the minister said he takes issue with the judgment of the High Court of May 21, which found that the Temporary Licence Request for Proposal (RFP) was not valid and has appealed this judgment. 'However, in its judgment of May 21, the court accepted that it is in the public interest that the National Lottery should continue to operate to raise revenues to fund worthy causes, notwithstanding that the court was not satisfied with the RFP process. Additionally, another court affirmed my power to appoint a temporary licensee in its judgment of May 30,' said Tau. It is in the context of both the May 21 and 30 judgments that the minister received and accepted the advice from the commission that he appoint a temporary licence operator on an urgent basis. 'I am pleased that the National Lottery operations will not be interrupted during transition from the third to [the] fourth licence operations and that worthy causes will continue to receive support,' said the minister. – Breaking news at your fingertips… Follow Caxton Network News on Facebook and join our WhatsApp channel. Nuus wat saakmaak. Volg Caxton Netwerk-nuus op Facebook en sluit aan by ons WhatsApp-kanaal. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
The Citizen
3 days ago
- Business
- The Citizen
No disruptions to lottery operations as temporary licensee appointed
Ithuba's licence ends today. There will be no disruptions to lottery operations as Trade, Industry and Competition Minister Parks Tau has appointed a temporary licensee. Tau announced on Saturday that he has concluded successful negotiations with Ithuba Holdings and signed a temporary licence agreement for them to operate the National Lottery and Sports Pool for a period of 12 months, effective from 1 June 2025. On 28 May 2025, Tau announced the successful conclusion and appointment of Sizekhaya Holdings (RF) (Pty) Ltd ('Sizekhaya') as the fourth National Lottery and Sports Pools operator. Ithuba's licence ends today. ALSO READ: Big change to Lotto operations: Will tickets be on sale next week? Eight applications to take over from Ithuba Holdings had been on the table. The licence will cover operations for all national games, as well as sports pool products. Sizekhaya's appointment takes effect on 1 June 2026 and requires a transition from the third National Lottery and Sports Pools operations to the fourth National Lottery and Sports Pools Licence operations, said Tau. 'On advice of the National Lotteries Commission, I also authorised that a temporary licensee must be appointed in terms of section 13B of the Lotteries Act, 1997. The temporary licence will ensure the continuation of the operations in the period that the transition is required from the third to the fourth licence operations,' said Tau on Saturday. 'I am pleased that the National Lottery operations will not be interrupted during the transition from third to fourth licence operations and that worthy causes will continue to receive support.' Outgoing lottery operator Ithuba disappointed Following the minister's announcement of the new operator, Ithuba said they were 'deeply disappointed' that the department would negate their contribution to the country's lottery infrastructure. ALSO READ: You may not be able to get a Lotto ticket after today 'As a fully South African-owned and black-empowered operator, Ithuba Lottery has invested significantly in developing the first African central lottery system, owned and developed for Africa by South Africans,' stated the outgoing operator. 'This decision disregards the progress made in building a truly home-grown lottery ecosystem that empowers small businesses, drives local job creation, and channels maximum revenue to good causes,' it added. Ithuba's legal team will consider the legal implications of the decision before deciding on a way forward. NOW READ: SIU is not done with NLC yet, as more corruption allegations emerge Additional reporting by Jarryd Westerdale
IOL News
6 days ago
- Business
- IOL News
National Lottery licence awarded to Sizekhaya Holdings amid legal disputes
Sizekhaya Holdings, a consortium partly owned by gambling company Goldrush, is the next operator of the National Lottery for the next eight years. Minister of Trade, Industry and Competition Parks Tau has named Sizekhaya Holdings, a consortium partly owned by gambling company Goldrush, as the next operator of the National Lottery for the next eight years. Sizekhaya is led by KwaZulu-Natal businessmen Moses Tembe and Sandile Zungu, the owner of AmaZulu Football Club. Last week, Judge Sulet Potterill ordered Tau to announce the bidder by May 28 and declared the decision to issue a temporary licence unconstitutional. However, to prevent lottery ticket sales from halting, Potterill suspended the order for five months, allowing a temporary licence to be awarded for that period. Making the announcement on the court-ordered date, Tau said on Tuesday that he had intended to announce the successful bidder on the same date, provided that licence agreement negotiations were successfully concluded. However, Tau also further said that he will seek legal advice to appeal the Pretoria High Court's findings and orders that forced his hand to make this announcement. 'With due respect to the Honourable High Court, my announcement fulfills my undertaking to the bidders and the Court before the hearing of the application. This concludes a long and challenging process of evaluating eight applications for the fourth licence. I appreciate that this has been an enormous and complex endeavour,' he said. The National Lottery is currently operated by Ithuba Holdings, whose licence expires on May 31. Due to delays in announcing the successful bidder, a temporary licence awarded to Ithuba Lottery, a sister company of Ithuba Holdings, will take effect on June 1. Thereafter, Sizekhaya is expected to assume operations for eight years. Tau has not clarified the lingering uncertainty regarding when Sizekhaya's licence will commence, with expectations that Ithuba Holdings will operate for an additional five months until the new operator takes over. The announcement comes as the National Lotteries Commission (NLC) launched an urgent application to amend a Johannesburg High Court order limiting the temporary licence to five months. The NLC argues that unless the order is revised to allow the temporary licence to remain valid for a full year, lottery sales will cease on Sunday, 1 June, as it would not be financially viable for Ithuba Lottery to continue. The licence has been the subject of extensive litigation in the Gauteng High Court, initiated by one of the bidders, Wina Njalo. Wina Njalo claimed that Minister Tau favoured Ithuba by delaying the announcement and deciding to issue a temporary licence. They argued that only Ithuba had the infrastructure in place to qualify for the temporary licence. Ithuba Holdings' licence was previously extended for two years, making it ineligible under the Lotteries Act to receive another licence. However, a separate entity, Ithuba Lottery, which shares directors with Ithuba Holdings, also bid for the licence. Sizekhaya's leading bid has sparked controversy, with parliamentarians from the EFF and Build One South Africa questioning how the bid was awarded.
The Citizen
19-05-2025
- Business
- The Citizen
Ithuba poised to run Lottery for next year — despite legal concerns
Company closely linked to the current lottery operator is busy negotiating a temporary licence to run the lottery. Parks Tau, the minister responsible for South Africa's lottery, has entered into negotiations with a company with close links to Ithuba Holdings, the current licence holder, for a 12-month temporary licence to run the lottery until 1 June 2026. This comes after months of delays and uncertainty over who will run the lottery after the current licence expires at the end of this month. Tau has also been accused of favouring Ithuba in the process. Ithuba Holdings, which has been running the lottery since 2015, was not eligible to apply for the 12-month temporary licence. Ithuba Holdings' original licence expired in 2023 and the contract was extended for two years until 30 May 2025. The Lotteries Act says that the minister is not allowed to extend a licence more than once, and then only for a maximum of two years. But another company, Ithuba Lottery, which has six of the same directors and the same website as Ithuba Holdings, bid on the temporary licence and is now likely to be appointed. ALSO READ: Lottery ticket sales likely to be suspended from 1 June A letter distributed by Zamani Holdings, the owner of Ithuba Holdings, to senior staff confirmed that Ithuba Lottery is the preferred bidder and was currently in negotiations 'to finalise this agreement'. The temporary licence will run from 1 June 2025 to 31 May 2026. After that, a new company will run the lottery for the next eight years. Annual lottery sales were R7.3 billion in 2024. Business Day reported earlier this week that the Sizekhaya Consortium, in which gambling company Goldrush is the main shareholder, is likely to be appointed for the eight-year licence. GroundUp has now independently confirmed that the Sizekhaya is the preferred bidder. Sizekhaya was one of eight consortia that bid for the licence. A source with knowledge of the negotiations told GroundUp that Sizekhaya 'is currently working to meet the requirements and sign the contracts so the minister can announce them as the fourth lottery operator at the end of May'. If negotiations are successfully concluded, Sizekhaya's licence would come into effect on 1 June 2026, allowing a year to transition from the temporary licence holder and put their tech in place, manufacture ticket sales equipment for retail outlets and hire staff. Tau's spokesperson, Yamkela Fanisi, did not respond to questions GroundUp sent via WhatsApp by the time of publication. His response will be added if received. Ithuba favoured? Wina Njalo, an initiative of Hosken Consolidated Investments (HCI) Foundation, also bid on the eight-year lottery licence. In March, Wina Njalo applied to the High Court, challenging Tau's decision to issue the temporary licence and asked the court to declare unlawful Tau's failure to appoint the fourth lottery licence holder in time. Njalo claimed in court papers that Tau was favouring Ithuba by issuing a temporary licence request for proposals on short notice, because Ithuba would be the only company with the technology and infrastructure in place to continue operating the lottery. In his replying affidavit in the case, Tau said he would announce the successful bid winner for the eight-year licence by 28 May. He said the temporary licence was necessary as the new company will not be ready to take over as operator immediately. ALSO READ: Government postpones announcement of new lottery licence operator – again GroundUp understands that the temporary licence conditions make provision for whoever is granted it to use the current licence holder's systems and ticket sales equipment. The court papers revealed the links between Ithuba Holdings and Ithuba Lottery. Wina Njalo argued in court that only entities that applied for the new licence were eligible to apply for the 12-month temporary licence. Wina Njalo's affidavit says that they first believed that Ithuba Holdings and Ithuba Lottery were the same entity, 'given the similarities in names'. But then, Wina Njalo discovered that Ithuba Holdings and Ithuba Lottery were, in fact, two separate companies, but that they shared six active directors. They also share a website. Charmaine Mabuza, who is the CEO of Ithuba Holdings, signed a bid extension notice on behalf of Ithuba Lottery. Wina Njalo argued that although these are two different companies, they are 'de facto the same party' and Ithuba Lottery should therefore not be eligible to bid on the licences. ALSO READ: Accounting firms compiled fraudulent financial statements for NPOs – SIU on NLC corruption Responding in an affidavit, Ithuba Lottery's CEO, Louis Amera du Pisane, insisted that the two Ithubas were 'separate entities'. He said Wina Njalo had incorrectly assumed that Ithuba Lottery was the incumbent operator of the national lottery. This misconception had led to claims that the temporary licence favoured Ithuba Lottery, which is not the case, he said. 'Wina Njalo's arguments collapse once the distinction between the two entities is understood,' Du Pisane said. Lotto ticket sales could be suspended The case was heard earlier this month and judgment was reserved. Should the court rule in favour of Wina Njalo and set aside the temporary licence, it could lead to a suspension of lottery ticket sales until the issue is resolved, which could take many months. But a suspension is unlikely to stop the National Lotteries Commission (NLC), which relies on a percentage of lottery ticket sales to fund good causes, from issuing grants. The NLC has told Parliament it has reserves of R4.3-billion. Zamani Holdings is owned by Ithuba Holding's current CEO, Charmaine Mabuza and her husband, Eric Mabuza. Zamani and its subsidiaries have a growing footprint in Africa. Earlier this month, it was appointed as operator for the Tanzanian Lottery. It is also about to launch a national lottery in Uganda and is currently finalising negotiations to run the national lottery in Botswana. Sizekhaya bid controversy The Sizekhaya Consortium's leading bid for the eight-year licence has already raised controversy with some political parties. The EFF has called for Tau to appear before Parliament to explain his decision. BOSA, which has submitted a PAIA application, has called for 'transparency' in how the minister came to his decision. ALSO READ: EFF slams Treasury for 'unlawful' R300m lotteries transfer Goldrush, the biggest shareholder in the Sizekhaya Consortium, is a JSE-listed company with extensive experience in online gambling. The consortium is led by KwaZulu-Natal businessmen Moses Tembe and Sandile Zungu. Zungu ran for the ANC KwaZulu-Natal chair position in 2022 before dropping out after he failed to garner enough support, according to Business Day. Sizekhaya's tech partner is Genlot, which operates the Chinese lottery — the second biggest in the world. Based in Shenzhen, China, Genlot is involved in several other lotteries around the world, including Nigeria, Ghana, Kenya, Brazil and Jamaica. The company has an annual turnover of $60 billion in 'sales processed' and has a 19% 'global market share', according to its website. On Thursday, 15 May, Ithuba Holdings circulated a notice to retailers selling lottery tickets. Headed 'Lottery system update,' Ithuba Holding chief lottery director, Brendan Burns said the current National Lottery licence will expire on 31 May 2025. 'The Minister of Trade, Industry and Competition has assured the public that a temporary solution will be announced before then to ensure there is no disruption to … operations.' 'In this regard, the award of a temporary lottery licence is expected to be announced shortly.' 'While the final outcome remains uncertain, Ithuba Holdings and Ithuba Lottery must act responsibly and prepare for the possible scenario in which Ithuba Lottery is required to commence operations of the National Lottery for a temporary licence period. It is therefore essential that we proactively implement all necessary measures to ensure operational readiness and continuity,' he wrote, setting out deadlines for the changeover. 'The timelines ahead are tight, and your collaboration is critical in helping us meet these key milestones.' This article originally appeared on GroundUp and was republished with permission. Read the original article here.
