A lady buys lottery tickets at a avenue vendor. File picture
Simply weeks after issuing a short-term lottery operator licence tender, the minister liable for the lottery has backtracked and now says he’ll announce who will run South Africa’s lottery and sports activities swimming pools for the subsequent eight years “on or earlier than Wednesday, 28 Might 2025.”
Minister of Commerce, Business and Commerce Parks Tau introduced his determination by way of a discover printed on the digital knowledge room platform, a closed platform used to speak with authorized bidders. The small print of his determination, which haven’t been made public, have been shared on the platform final Wednesday.
The licence of Ithuba, the incumbent, expires on 31 Might, and the tender for a short lived operator to run the lottery for 12 months from 1 June falls away.
In his discover, Tau stated he intends “to announce the id of the profitable applicant after negotiations concerning the licence have been concluded to my satisfaction”.
He additionally referred the bidders to a clause within the Request for Proposal (RFP): “Ought to negotiations on the ultimate phrases of the licence fail to be concluded to the satisfaction of the minister, the minister reserves the suitable to barter with the subsequent rating applicant except there are goal grounds for the minister to barter with one other applicant.”
Late final month, Tau prolonged the bid adjudication interval by a yr however was silent on what would occur to ticket gross sales after Ithuba’s licence expired.
It’s now possible that the sale of lottery tickets will probably be suspended from midnight on 31 Might, when Ithuba’s licence expires.
Until Ithuba is awarded the licence once more, which might unleash a wave of litigation by shedding bidders, “it seems possible that the lottery will probably be suspended whereas the winner units up the {hardware} and software program it might want to function the lottery”, one of many bidders advised GroundUp.
“It takes six months to transition between operators. The brand new operator runs parallel to the previous one. There’s a lead time to fabricate the machines [lottery ticket sales equipment],” he stated. “You additionally must have knowledge centres etcetera arrange in order that when the switchover to the brand new operator occurs, you might be prepared.”
However the Nationwide Lotteries Fee (NLC) will have the ability to proceed allocating grants to worthy causes and masking its overheads from its R4.3-billion reserve fund, Commissioner Jodi Scholtz advised Parliament just lately.
Ithuba was initially awarded the eight-year licence, valued at between R60-billion and R65-billion over the lifetime of the licence, in June 2015. It was prolonged for twenty-four months by the minister on the time, Ebrahim Patel, simply earlier than it was as a result of expire on 31 Might 2023, after the NLC argued that Covid had affected Ithuba’s earnings.
By way of the Lotteries Act, the minister is just capable of prolong a licence for a non-renewable interval of 24 months, and the short-term licence appeared to have been a workaround.
Court docket motion to proceed
Tau’s communication got here only a day after one of many bidding consortiums, Wina Njalo, an initiative of the HCI Basis, launched an pressing courtroom utility within the excessive courtroom in Pretoria on 24 March to pressure the minister to award the fourth licence.
Wina Njalo is searching for an order directing Tau to announce the profitable bidder earlier than 9 Might and to barter and conclude the licence settlement no later than 31 Might.
Regardless of Tau’s about-turn, Wina Njalo nonetheless plans to proceed with its utility, in keeping with a well-informed supply who requested to not be recognized.
Wina Njola declined to remark.
In its utility, Wina Njalo accused Tau of “irritating” the awarding of the fourth nationwide lottery licence with a purpose to advance the pursuits of Ithuba.
Wina Njalo additionally requested the Pretoria Excessive Court docket to difficulty an order declaring unconstitutional and illegal the request for proposals for the short-term licence. The matter is because of be heard on 22 April.
The minister’s determination to nominate a everlasting lottery operator quite than difficulty a short lived licence didn’t deal with the problems raised in Wina Njalo’s utility, the supply advised GroundUp.
In his founding affidavit, Wina Njalo CEO Dawid Muller stated, “The stark discrepancy between the sluggish transferring fourth nationwide lottery licence course of and the extraordinarily expedited novel short-term licence course of in respect of the identical bidders, confirms that the additional delay in awarding the fourth licence and any award of a short lived licence is irrational, unreasonable and for ulterior goal or in any other case unconstitutional.”
Muller additionally submitted that the minister’s “alleged considerations” over the fourth licence bidding and analysis course of have been baseless, as a result of the short-term licence was confined to the authorized bidders for the fourth licence.
He questioned how the minister was capable of make an “expedited determination” in a single course of however not within the different.
“The strategy is so solely irrational that it can provide rise to just one conclusion: that the Minister is actuated by an ulterior goal and is appearing in a way which is able to advance the curiosity of 1 celebration – Ithuba.”
When he postponed his determination in December final yr, Tau hinted at attainable issues, together with the political connections of some members of bidding consortiums.
“I have to additionally be sure that the homeowners and managers of the profitable candidates are, because the Act states, ‘match and correct individuals’.’ As well as, I have to be sure that no political celebration or political office-bearer has any direct monetary curiosity within the applicant or a shareholder of the applicant.”
A supply near one of many consortiums bidding for the licence advised GroundUp: “If he can decide and does so earlier than 31 Might, there was no want for extension of the bid validity for one yr, and that entire effort was simply plain cock and bull.
“He has utterly [messed] up this course of. It was such a easy factor to do – simply comply with the suggestions of NLC, which he has had since October final yr.”
A supply near a special consortium advised GroundUp earlier than Tau’s newest determination that they might not apply for the short-term licence to run the nationwide lottery for a yr when the present licence expires on 31 Might.
“Solely Ithuba may run the lottery from 1 June, and the excessive price concerned in working the short-term licence means it is mindless for us to bid for only a yr. We have now already spent between R15-million to R20-million on our bid, and that’s what we’ll think about,” he stated.
One other supply concerned with one of many bidding consortiums additionally questioned the time Tau has taken to determine on the fourth lottery licence.
The RFP for the second licence took ten months from bid submission to licence signature, whereas the third licence took 11 months, the supply advised GroundUp.
“Within the case of the third licence, [former] minister [Rob] Davies, like the present scenario, requested additional evaluations and investigations for issues much like what the minister vaguely urged in his December 2024 media launch.
“In truth, Minister Davies obtained the Adjudication Report on 11 August 2014 and engaged with the Most well-liked and Reserve Candidates on 23 October 2014 – simply 2 months and 11 days later.
“For the fourth licence, the RFP was introduced in August 2023, with a submission deadline of three February 2024. Now, since receiving the proposals, 14 months have handed with out an announcement or a signed licence, despite the fact that this RFP course of was already delayed by two years,” the supply stated.
This text was first printed by GroundUp.