Goldrush-backed Consortium Wins Lottery Contract, But Start Date Remains Uncertain
Sizekhaya Holdings, a consortium partly owned by the gambling company Goldrush, has been announced by Trade, Industry and Competition Minister Parks Tau as the next operator of South Africa’s national lottery.
The current operator, Ithuba Holdings, holds the license that expires on 31 May. Due to delays in announcing the successful bidder, a temporary license awarded to Ithuba Lottery — a sister company of Ithuba Holdings — will commence on 1 June. The official handover to Sizekhaya is expected to occur for an eight-year period; however, the exact starting date of Sizekhaya’s license remains uncertain.
The National Lotteries Commission (NLC) has initiated an urgent legal application to modify a High Court order in Johannesburg, which currently limits the duration of the temporary license to five months.
The NLC states that “unless the order is changed to allow the temporary licence to remain valid for a full year, lottery sales will stop on Sunday, 1 June.” The NLC emphasizes that “otherwise, it will not be financially feasible for Ithuba Lottery.” Considering that Sizekhaya requires at least nine months to prepare for full operations, the timing of the license transfer is critical.
This licensing process has been the subject of extensive litigation in the Gauteng High Court, initiated by one of the bidders, Wina Njalo. The bidder argued that Minister Tau had favored Ithuba by delaying the announcement and opting to issue a temporary license, noting that “only Ithuba had the infrastructure in place to qualify for the temporary licence,” according to Wina Njalo.
Ithuba Holdings’ license has previously been extended for two years, rendering it ineligible under the Lotteries Act for another license. However, a separate entity, Ithuba Lottery, which shares directors with Ithuba Holdings, participated in the bid.
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Last week, Judge Sulet Potterill ruled that Minister Tau must announce the successful bidder by 28 May and declared that “the decision to issue a temporary licence was unconstitutional.” To prevent a halt in lottery ticket sales, the judge suspended her order for five months, allowing the temporary license to be valid during this period.
In a statement on Wednesday, Minister Tau remarked, “It is most unfortunate that this matter has already become the subject of litigation and a judgment of the high court. I am seeking legal advice with a view to appealing against the judgment’s findings and orders … With due respect to the [court], my announcement [of the lottery licence holder] is the result of my undertaking made to the bidders and the court before the hearing of the application.”
Minister Tau also noted that he did not announce a reserve bidder, indicating there is no backup plan should the deal with Goldrush falter.
Sizekhaya’s selection has sparked controversy, with parliamentarians from the EFF and Build One South Africa questioning the awarding process. The consortium is led by KwaZulu-Natal businessmen Moses Tembe and Sandile Zungu, the latter of whom owns AmaZulu Football Club. Zungu previously ran for the ANC KwaZulu-Natal chair position in 2022 before withdrawing.
Sizekhaya’s technological partner is Genlot, a Chinese-based company operating the second-largest lottery in the world. Based in Shenzhen, China, Genlot manages lotteries across Nigeria, Ghana, Kenya, Brazil, and Jamaica. The company reports an annual turnover of $60 billion in “sales processed” and claims a 19% “global market share.”
Further developments regarding the definitive start date of Sizekhaya’s lottery operations are anticipated as legal proceedings and negotiations continue.
Source: Groundup
