Ithuba seeks urgent court order to stop lottery licence handover

Ithuba Lottery has launched urgent court proceedings to stop the implementation of the fourth lottery licence award to Sizekhaya. Illustration: Lisa Nelson

• Ithuba Lottery has launched urgent court proceedings to stop the implementation of the fourth lottery licence award to Sizekhaya, pending a review application challenging the entire award process.
• Ithuba’s lawyers claim Minister Parks Tau abandoned the original scoring criteria and allowed premature negotiations with Sizekhaya.
• The application alleges irregularities, including unqualified committee members and potential conflicts of interest, following media reports of political connections to Sizekhaya that Ithuba says were not properly investigated during the bidding process.

Losing lottery licence bidder Ithuba Lottery has launched urgent court proceedings in the Pretoria High Court to stop the implementation of the award of the lottery licence to Sizekhaya. Ithuba wants to freeze the award, pending the outcome of its review application, filed in July this year, seeking to set aside the award in its entirety.

Ithuba Lottery (a sister company to Ithuba Holdings which ran the lottery under the third licence and is currently running it under a temporary licence granted by Minister of Trade and Industry Parks Tau), was, according to the Minister, ranked second in the licence bid race.

This emerged when he provided his reasons for awarding the licence to Sizekhaya as part of the review application brought by Ithuba Lottery and a similar one brought by another losing bidder, Serbian-based Lekalinga.

In the urgent application, set down to be heard on 7 October, Ithuba Lottery attorney Johan Roodt says the reasons delivered on 5 August reveal that the award was “vitiated by a series of irregularities”.

These include that Tau and his various committees “jettisoned the scoring criteria set out in the Request for Proposals (RFP) and instead adopted an entirely subjective and unauthorised scoring criteria”.

Roodt said the Minister had not appointed an independent quality assurer. He had also allowed the National Lotteries Commission (NLC) to prematurely negotiate the licence with Sizekhaya. He had then made the award when Sizekhaya did not have fully committed funding, and could not commence operations in the time period specified by the RFP.

“The RFP constitutes the ‘rules of the game’ and may not simply be ignored at whim by the Minister,” Roodt said.

“These irregularities violate Ithuba Lottery’s rights to just administrative action and fair, competitive and equitable public procurement.”

Implementation

Sizekhaya has now indicated that it will commence implementation in early September 2025 and conclude it in June 2026.

The interdict, Roodt said, was necessary because by the time the review application was heard, Sizekhaya would have substantially implemented its operations.

“If Ithuba Lottery succeeds in the review, the Minister, the NLC and Sizekhaya will then inevitably contend that the award is too far gone to be set aside,” Roodt said.

“As long as the implementation of the licence is interdicted and restrained, the Minister will be able to ensure that the lottery continues to operate through a temporary licence.”

Evaluation committee scrutinised

Roodt took aim at the composition of the bid evaluation committee, saying one of its members, a chartered accountant, was “tainted by allegations” relating to his profession which led to his suspension from the Independent Regulatory Board of Auditors.

Some members, he said, had no expertise in gambling or lotteries. Two had been investigated for conflicts of interest. While the Minister had said he was satisfied that no conflicts existed, he had not provided any details.

Roodt said there had been media reports that one member had a business association with Sizekhaya’s major shareholder, Goldrush, raising concerns that she had “systematically scored Ithuba Lottery significantly less than all other committee members”.

After the announcement of the successful bidder, there had also been media reports about alleged political links to Sizekhaya.

“I must make it plain that Ithuba Lottery is not in a position to confirm the veracity of these reports, however, they raise significant concerns about whether the minister complied with the RFP by ensuring that no political office bearer had any direct or indirect financial interest in the successful application.

“While the Minister said he had instructed the NLC to investigate these links, Ithuba Lottery has not been notified about the outcome of this investigation, or even whether it has been completed,” Roodt said.

“He omits to explain why Sizekhaya’s political party connections were not considered and identified in the bid evaluation process. Plainly these connections were not identified for the reason the Minister himself accepts, the fitness and propriety assessment was never completed.”

Roodt said the Minister, in his reasons, had conceded that the evaluation and adjudication committees had not followed correct processes and he had then “devised an entirely new process” by appointing a ministerial committee to re-assess the bids.

Roodt said the balance of convenience favoured the granting of an interim interdict.

The Minister, the NLC, Sizekhaya and all the other losing bidders have until 8 September to file notices of opposition.

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