Court Showdown Over Delayed R180bn National Lottery Licence
A legal battle is brewing between Trade, Industry & Competition Minister Parks Tau and bidders vying for South Africa’s lucrative R180bn national lottery licence, after Tau rejected a proposed court order to fast-track the process.
The dispute stems from Tau’s decision to pause awarding the permanent eight-year licence, opting instead for a 12-month temporary licence, a move critics claim unfairly benefits the current operator, Ithuba Holdings. Eighteen bidders initially competed, with eight shortlisted after presenting to the National Lotteries Commission (NLC).
Minister’s Controversial Move Sparks Outrage
Bidders were stunned when Tau halted the permanent licence process, extending bid validity and issuing a Request for Proposal (RFP) for a temporary licence. Some allege the temporary RFP’s requirements mirror those of the permanent bid, raising suspicions of bias.
In a March 26 letter obtained by Sunday Times, Tau stated he would announce the fourth licence winner by May 28, pending negotiations. However, he cautioned that delays could occur.
Wina Njalo Consortium Fights Back
One bidder, the Wina Njalo Consortium, drafted a court order demanding Tau:
- Select a permanent licence winner by May 9,
- Finalize negotiations, and
- Issue the licence by May 28.
The order also calls for scrapping the temporary RFP and extending bid validity.
Dawid Muller, Wina Njalo CEO, argued:
“Since the minister mentioned his target date and that he intended to award the fourth national lottery licence before May 31, we believe he should have no difficulty with the agreed order. In our view, such an order would simply reflect the minister’s own timeline, help avoid a rushed hearing, and promote transparency and certainty for everyone involved — including other bidders and the public.”
Tau’s Firm Rejection
Responding via the State Attorney’s Office, Tau refused the draft order. Pravani Pillay, representing the minister, stated:
“The extension of the bid validity period may be necessary if the process for awarding the fourth licence cannot be concluded, for whatever reason, by May 31 2025.”
With tensions escalating, the first week of May could see a high-stakes court battle over the future of South Africa’s R180bn lottery industry.
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- Minister of Trade Parks Tau says he will announce the winner of the eight-year lottery licence “on or before 28 May”.
- With Ithuba’s licence expiring on 31 May, lottery ticket sales will likely be suspended.
- Licence bidder Wina Njalo is proceeding with court action, accusing Tau of “frustrating” the licence process to favor Ithuba.
Just weeks after issuing a temporary lottery operator licence tender, the minister responsible for the lottery has backtracked and now says he will announce who will run South Africa’s lottery and sports pools for the next eight years “on or before Wednesday, 28 May 2025.”
Minister of Trade, Industry and Commerce Parks Tau announced his decision via a notice published on the virtual data room platform, a closed platform used to communicate with approved bidders. The details of his decision, which have not been made public, were shared on the platform last Wednesday.
The licence of Ithuba, the incumbent, expires on 31 May, and the tender for a temporary operator to run the lottery for 12 months from 1 June falls away.
In his notice, Tau said he intends “to announce the identity of the successful applicant after negotiations regarding the licence have been concluded to my satisfaction”.
He also referred the bidders to a clause in the Request for Proposal (RFP): “Should negotiations on the final terms of the licence fail to be concluded to the satisfaction of the minister, the minister reserves the right to negotiate with the next ranking applicant unless there are objective grounds for the minister to negotiate with another applicant.”
Late last month, Tau extended the bid adjudication period by a year but was silent on what would happen to ticket sales after Ithuba’s licence expired.
It is now likely that the sale of lottery tickets will be suspended from midnight on 31 May, when Ithuba’s licence expires.
Crédito: Link de origem