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The Citizen
3 days ago
- Business
- The Citizen
You may not be able to get a Lotto ticket after today
'I do not accept that the sky will fall' says judge The National Lotteries Commission (NLC) has failed in its bid to change a recent court ruling limiting the temporary licence to operate the lottery to five months. This means ticket sales may stop before Sunday, 1 June. The current licence, held by Ithuba Holdings, expires on Saturday. After that, their sister company, Ithuba Lottery, was supposed to take over the licence for a period of twelve months. But after last week's Gauteng High Court ruling that the issuing of the temporary licence is unconstitutional and can only be issued for five months, Ithuba Lottery said a five-month licence is financially unfeasible and may not continue operating the lottery after Saturday. And the new licence holder, Sizekhaya Holdings, which is set to take over from Ithuba Lottery for a period of eight years, will need at least nine months to set up its operations. The NLC therefore applied to change the court order to allow a twelve-month licence. But Judge Omphemetse Mooki ruled against them on Friday. Will funding stop? A source at the NLC told GroundUp that the board is in emergency meetings to discuss the way forward. If lottery ticket sales do stop after Saturday, the National Lottery Distribution Fund does still have about R4.3-billion in reserves to continue issuing grants to good causes. 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 lottery licence tender. Wina Njalo argued that the NLC was seeking to relitigate the same issues that had already been heard by the court. If it was found that five months was not enough time, it argued, then the NLC could approach the court at that stage. It said the application to vary the order was yet another example of how the NLC was seeking to favour the Ithuba companies and they were not entitled to insist on making a profit, given that Ithuba Holdings had already made 'huge profits' by operating the lottery for the last 10 years. In his ruling, Judge Mooki said the issue was whether it was just and equitable to extend the period that the temporary licence can operate before it is declared invalid and, in doing so, interfere with the discretion exercised by another court. Such interference was 'very sparingly exercised'. He said he was not persuaded that the NLC had made out a case. 'There is no substantive support that Ithuba Lottery will suffer a loss of R51-million unless it is granted a temporary licence for 12 months. There was complete silence from Ithuba Lottery. It did not file any affidavits,' the Judge said. He pointed to the fact that the NLC on 22 May 2025, when it was aware of Judge Potterill's order, had written to Ithuba Lottery requesting it sign a licence to operate for 12 months. 'It was thus inviting the Ithuba Lottery to sign an agreement that would breach the order made on May 21.' While the NLC had disclosed the response from Ithuba Lottery, it had not disclosed its own letter. ALSO READ: Big change to Lotto operations: Will tickets be on sale next week? 5 months could be long enough Judge Mooki said the NLC had also not put up any evidence that Sizekhaya needed more than five months to set up operations. In fact, as Wina Njalo had pointed out, a condition of the fourth licence was that the successful bidder must be able to operate within five to six months of being awarded the licence. He said in claiming that its reserves would be significantly depleted should there be no operator after 1 June, the NLC had 'over-egged the pudding'. 'I do not accept that the sky will fall after 1 June should Ithuba Lottery refuse to sign an agreement to conduct lottery operations as determined in (Potterill's) order,' he said. The request for proposals for the temporary licence was issued when it became apparent that Minister Parks Tau would not meet the strict deadlines to announce the new lottery licence holder, giving it time to take over operations. He only made the announcement on 28 May, just three days before the expiration of Ithuba's licence. He has yet to provide reasons for the delay. This article originally appeared on GroundUp and was republished with permission. Read the original article here. NOW READ: SIU is not done with NLC yet, as more corruption allegations emerge
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.
Eyewitness News
23-04-2025
- Business
- Eyewitness News
Lottery licence: 'All will be revealed in good time,' says minister
Trade, Industry and Competition Minister Parks Tau says he will announce the successful bidder for the fourth lottery licence on 28 May 2025, barring 'anything beyond my control'. This, he says, means that the court action against him by bidder Wina Njalo is 'moot'. 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.
