Latest news with #LotteriesAct
IOL News
5 days ago
- Business
- IOL News
Why Parks Tau backs Sizekhaya Holdings for the national lottery licence
Minister of Trade, Industry and Competition, Parks Tau, has addressed the ongoing controversy surrounding the award of the national lottery. Image: GCIS The Minister of Trade, Industry and Competition, Parks Tau, has publicly defended the ongoing controversy surrounding the award of the highly anticipated fourth national lottery licence to Sizekhaya Holdings. Tau was legally obligated to disclose his reasons for selecting the company in an affidavit, doing so in response to two court challenges requesting a review of the award. Tau has finally disclosed his reasons for awarding the contract to Sizekhaya citing the consortium's well-balanced bid, impressive technology partners, and high projected revenue as the reasons for its selection. He also commended Sizekhaya's plans to rejuvenate the suite of current lottery games and its broader marketing plans and spend. Tau's affidavit, filed in the Gauteng High Court in Pretoria, also reveals that Sizekhaya Holdings "pipped the others to the post" due to its impressive bid. 'The bids by Giya Games, Lekalinga, and Umbelelo were ranked the lowest, while those by Bosela, Ithuba Lottery, Ringeta, Sizekhaya, and Wina Njalo were neck and neck,' Tau wrote in the affidavit. He highlighted Sizekhaya's "strong technology partners" and "high revenue projections" as key factors influencing the decision. The decision has also been marred by controversy, with allegations of political interference and connections between Sizekhaya's shareholders, the ANC and Deputy President Paul Mashatile. Tau has been accused of not adequately addressing concerns about Mashatile's alleged connections to Sizekhaya Holdings. In the affidavit, Tau explained why he launched an investigation into the involvement of politicians, including Mashatile, in the tender awarding process. Mashatile's sister-in-law, Khutso Bogatsu, reportedly has shares in the company, sparking concerns about potential conflicts of interest. In response to these allegations, Tau said: 'I have instructed the National Lotteries Commission (NLC) to investigate the alleged connections. Tau revealed his decision to override his advisory panels, setting aside Ringeta's bid due to its affiliation with the Batho Batho Trust, a known ANC donor. Ringeta had initially been favored by both the bid evaluation and adjudication committees, but was later flagged by a quality assurance committee (QAC) appointed by Tau. 'My decision was delayed because I was not convinced that the processes and outcomes were correct…This prompted speculation and even accusations that I was trying to favour one or other applicants. Nothing could be further from the truth. I refused to simply rubber stamp recommendations,' Tau said. The QAC's findings showed that Dr. Sibongiseni Dhlomo, an ANC MP, served as a trustee of the Batho Batho Trust. This made him an "office bearer," which is prohibited by both the Lotteries Act and the Request for Proposals (RFP) terms. Tau received legal counsel confirming Dhlomo's direct financial interest through the trust's 70% shareholding in Ringeta. The awarding of the contract to Sizekhaya Holdings has been met with court challenges from losing bidders, including Lekalinga and Ithuba Lottery. Tau and other respondents will have to file answering affidavits before trial dates are set. The DA has criticised Tau for relying on the NLC to investigate, given its failure to flag potential conflicts of interest in the bidding process. 'The DA will continue to seek answers on this clearly flawed process through our PAIA application and by ensuring the Minister accounts to Parliament. 'It is extremely concerning that the NLC evaluation and adjudication committees both failed to flag the glaring conflict of interest of their top candidate for the award of the lotto licence, Ringeta…the conflict of interest in awarding one of the state's largest tenders to a bidder part-owned by an ANC funding vehicle with a sitting ANC MP on its board of trustees is patently obvious,' DA Spokesperson on Trade, Industry & Competition, Toby Chance said.
TimesLIVE
27-06-2025
- Politics
- TimesLIVE
NLC pledges R10m financial support for flood-affected EC communities
The National Lottery Commission (NLC) pledged funds to support flood-affected communities in the Eastern Cape. The NLC leadership, led by the board chairperson Prof Barney Pityana and accompanied by its commissioner Jodi Scholtz, are expected to visit flood-affected areas on Friday. They are expected to meet AbaThembu King Buyelekhaya Dalindyebo at the Nkululekweni Royal Residence. The purpose of the visit is to officially inform the king, the royal house and key government stakeholders about the NLC's pledge to financially support flood-affected communities. The areas severely affected by destructive floods on June 10 include Mthatha,, Mnquma, Mbhashe, Great Kei and the Amahlathi municipality. Lives were lost, families displaced and basic services such as water, electricity and access to healthcare and education were disrupted. 'In response, the NLC is activating its research-based funding model as outlined in the Lotteries Act. 'The model enables the commission to fund worthy causes without a formal application process, particularly in response to emergencies, crises and disasters that adversely affect communities. 'Emergency interventions are conducted after a rapid needs assessment and are implemented in partnership with qualified not-for-profit organisations (NPOs) appointed to our national panel of strategic partners,' said Pityana. The Small Project Foundation (SPF) has been appointed to implement a high-impact relief intervention valued at R1m. Pityana said SPF is a registered NPO with more than 36 years' experience in the Eastern Cape, and has worked extensively in health, education and social development across the OR Tambo and Amathole districts. He said the SPF has long-standing relationships with government departments, local municipalities, clinics and schools, and a proven track record of delivering emergency and humanitarian support in collaboration with national and local stakeholders. Scholtz said the interventions include the distribution of food parcels, clean water, clothing, school uniforms and supplies, sanitary pads and essential healthcare support. She said: 'The relief will reach thousands of displaced and vulnerable households through a co-ordinated and accountable process supported by trained field teams in nine municipalities.'
Daily Maverick
20-06-2025
- Business
- Daily Maverick
Government plans national lottery: A shift toward state control amid concerns of corruption
Since its inception, a private company has been responsible for operating the lottery and selling tickets. That is set to change in 2034. The government plans to introduce a state-run national lottery instead of using a private operator, as has been the case since the Lotto was launched 25 years ago. Details of the intention to effectively nationalise the lottery were revealed in a Request for Proposals (RFP) for the latest operator licence, which has been awarded to the Sizekhaya Consortium. If a state lottery were to be implemented, it would only happen in 2034, when Sizekhaya's eight-year licence, which commences on 1 June 2026, expires. The concept of a state-run lottery was first introduced in a 2013 amendment to the Lotteries Act but was never implemented. National Lotteries Commission commissioner Jodi Scholtz told GroundUp that the provision for a state-run national lottery in the amendment 'was in part a response to the disruption experienced in 2007, when the country found itself without an active lottery operator for several months' due to litigation. 'This legislative provision was intended to ensure continuity of the lottery and protect public interest and revenue streams designated for good causes, should similar challenges arise in the future,' she said. The issue of a state-run lottery was hotly debated by the trade and industry portfolio committee during the previous, sixth Parliament. There were disagreements among MPs about the wisdom of nationalising the lottery, with some arguing that in light of the corruption at state entities this could lead to further misappropriation of funds. Those who were for nationalisation said it would reduce profiteering by the licence holder. One of the champions for nationalisation was former National Lotteries Commission (NLC) board member Dr Muthuhadini Madzivhandila, who argued for a state-run lottery when he unsuccessfully applied for the post of NLC chairperson. Madzivhandi, who subsequently died, corruptly benefited from lottery grants. Since the amendment, several policy and legal review processes had been conducted 'to explore the practical implementation of this provision,' said Scholtz. Yamkela Fanisi, the spokesperson of trade, industry and competition minister Parks Tau, failed to respond to questions about the prospect of a state-run lottery and the reasons for the possible change. Transition to state lottery In terms of the Request For Proposals, bidders for the fourth lottery licence were 'required to commit to positioning the state to transition from privately operated National Lottery and National Sports Pool operations to a state-owned and operated National Lottery'. Applicants were informed that they had to 'demonstrate their ability to capacitate the state to prepare for and ultimately become the operator of the National Lottery and the National Sports Pool at the expiry of the Licence Period'. They were also required to provide a plan for how they would 'support the state in developing the necessary infrastructure, skills, and capacity to operate the National Lottery and Sports Pool' — a key part of the Request For Proposals deals with the transfer of rights to technology to operate the lottery. Responding to questions, Sizekhaya sent an unsigned written reply: 'Genlot [its Chinese tech partner] has assigned intellectual property rights for its lottery software to its 51% locally owned subsidiary, Genlot SA.' In terms of its agreement, Genlot SA is authorised to transfer this intellectual property (IP) to 'the South African state if it decides to operate the lottery in the future', Sizekhaya responded, declining to disclose details of the terms and conditions of such a rights transfer. Opening the door to corruption and waste The prospect of a state-run lottery opening the door to corruption and inefficiencies in light of what happened at many parastatals and government entities, where billions of rand were lost, was raised by some critics. The DA's Mat Cuthbert, who played a key role in Parliament in helping expose the endemic corruption that overwhelmed the National Lotteries Commission under its previous leadership, said: 'At the time, the National Lotteries Commission only had access to approximately 34% of all revenue generated by the National Lottery, housed under the NLDTF (National Lottery Distribution Trust Fund.) One can only imagine how much more public funding would have been stolen had they had access to the approximately R7-billion generated in ticket sales revenue per annum.' Professor Alex van den Heever of the Wits School of Governance was also sceptical of a state-run lottery. The wide discretion granted to the minister of Trade, Industry and Competition to appoint the board, commissioner and distributing agencies 'has been a recipe for corruption as a single person appoints all the strategic decision-makers', he said. The move to a proposed 'state-led approach failed to address the corporate governance flaws of the original configuration', Van den Heever said. 'Ministerial discretion, the likely driver of structural corruption to date, is retained at the same levels as before. There is therefore a high likelihood of ministerial overreach, exacerbated by a general absence of independent supervision, institutional safeguards, added to the uncertain capabilities of state structures. 'It is my expectation that this approach is designed to facilitate state capture and corruption of various forms — improper appointments, corruption in procurement and the selection of distributing agencies. The new provisions specify that certain accountability structures need to be implemented, which are inadequate, with their design and implementation vulnerable to the wide discretion of the minister. This discretion enables the minister to circumvent any implemented formal structures. 'When power is concentrated, circumvention is relatively straightforward. In my assessment, the same levels of corruption as before are likely to persist into the future. Nothing is cured by this change.' DM
The Citizen
12-06-2025
- Business
- The Citizen
Retailers complain as Ithuba claims ‘seamless transition'
Retailers say lottery terminals are failing across South Africa, raising questions about the controversial emergency licence granted to Ithuba. In spite of complaints by retailers and the public of problems with the sale of lottery tickets since a switchover to a new operating system on 1 June, Ithuba Holdings says it has 'implemented a seamless transition in accordance with the approved transition plan'. The problems resulted in people complaining on Facebook after the switch to the new software, as they were unable to buy tickets at many retail outlets countrywide. Problems since switchover Retailers in Durban, Johannesburg and Cofimvaba, a village in Transkei, confirmed they had experienced problems since the switchover. Both retailers and customers complained that terminals in many outlets across South Africa were either slow, or out of order for days on end. Online ticket sales and sales via bank apps do not appear to have been affected. Ithuba said complaints by some retailers that the 'old system' was 'much better than the new one were baseless'. 'Ithuba has achieved one of the smoothest system transitions ever recorded in the lottery industry, both locally and internationally,' the operator said. 'Ithuba transitioned seamlessly on 1 June, with all banking partners (Capitec, FNB, Absa, Standard Bank, Tyme Bank, Nedbank, African Bank, and Old Mutual), handheld partners, telecom partners (Vodacom and MTN), and e-commerce platforms (website and mobile apps) – supporting over 250 000 devices nationwide.' ALSO READ: You can still play Lotto today, after last minute announcement Controversial emergency licence Ithuba Holdings has operated the SA lottery for the past 10 years, the maximum stipulated in the Lotteries Act and had not bid for the new fourth licence or the temporary one. A sister company, Ithuba Lottery, applied for the temporary licence, but instead, Ithuba Holdings was controversially awarded a 12-month emergency licence by Trade, Industry and Competition Minister Parks Tau, who has oversight of the lottery. Tau has yet to explain why he awarded the licence to a company that had not applied for it. The licence was awarded despite two damning court rulings. Tau has used a 2015 amendment to the Lotteries Act, which gives the minister wide powers in certain circumstances. The new software, Paytronix, which is owned by Ithuba, appears to be the cause of the problems since the switchover. Both Eric and Ben Carlos Mabuza, the husband and son of Ithuba CEO Charmaine Mabuza, are directors of Paytronix. For the past 10 years, the lottery has been run on software owned by International Game Technology (IGT), which is a software provider for numerous lottery operators worldwide. Fallout from legal battles and contract chaos The National Lotteries Commission took Ithuba to court in 2021, when it unsuccessfully tried to oust IGT as its software provider and replace it with Paytronix. ALSO READ: It's math! Here's why you're struggling to win the Lotto This led to a strained relationship between the two companies. When IGT's contract with Ithuba ended on 1 June, IGT declined to extend its contract for the temporary licence, The Citizen has reliably learned. IGT had partnered with Wina Njola in its unsuccessful bid for the new SA lottery licence. This left Ithuba scrambling to upgrade thousands of retail terminals countrywide. There were 16 790 terminals in retail outlets in 2022, according to the National Lotteries Commission's annual report for that year. Ithuba's support line has been inundated with calls from retailers complaining about problems, The Citizen was told. 'Seamless transition' 'Ithuba has implemented a seamless transition in accordance with the approved transition plan. All Ithuba terminals have a dual Satadom (hardware inside retail terminals), one with IGT software and the other with Paytronix software,' Ithuba said in response to questions from The Citizen. 'On 1 June, the terminals were re-routed to the Paytronix Satadom, and our technical teams are in the process of removing the IGT Satadoms. 'Transitions inherently involve a series of technical and hardware adjustments, and Ithuba's field support teams were prepared and positioned to deal with potential cases.' NOW READ: Lotto and Lotto Plus results: Wednesday, 11 June 2025
Daily Maverick
02-06-2025
- 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.'
