South Africa: Troubling Questions As Minister Gives Ithuba Another Year to Run Lottery

Ithuba Holdings has been granted a controversial 12-month lottery extension. This extension is an "emergency" temporary license from Minister Parks Tau. It allows Ithuba to operate for 11 years, exceeding the legal limit of ten years.

Tau's decision follows two court rulings that found the tender process unfair. These rulings indicated that Ithuba should have been excluded since it did not bid for a new permanent license.

The minister awarded this temporary license just hours before Ithuba's contract ended at midnight on Saturday. According to the Lotteries Act, an operator's license lasts eight years but can be extended once for two years. Ithuba’s original license was issued in 2015 and extended in 2023.

It is unclear why Minister Tau granted another year to Ithuba Holdings. The company did not apply for the new operator license; instead, a sister company, Ithuba Lottery, submitted a bid.

Tau's choice raises questions about fairness and legality. Even if he had chosen Ithuba Lottery, concerns would remain since both companies are closely linked. The creation of Ithuba Lottery appears to be a strategic move.

Despite court rulings against him, Tau used Section 13B of the Lotteries Act to issue this temporary license. This section gives him broad powers but does not clarify why he chose Ithuba Holdings over others.

When asked about his decision, Tau’s spokesperson said they were handling many media requests and would respond later. By publication time, no response had been received.

A recent judgment invalidated Tau’s decisions regarding the temporary license and bid extensions. The court found that the tender favored only Ithuba as capable of operating from June 1.

However, Judge Potterill suspended her order for five months. This allowed time for a new license holder, Sizekhaya Consortium, to take over after five months.

The National Lottery Commission (NLC) tried unsuccessfully to change this judgment. They faced pressure as ticket sales could have stopped on June 1 without resolution.

Negotiations between NLC and Ithuba Holdings were tense as deadlines approached. It remains unclear why Ithuba Lottery withdrew from negotiations in favor of its parent company.

On Saturday evening, with time running out, there was still no signed agreement ensuring ticket sales would continue uninterrupted. The NLC assured Parliament they had R4.3 billion in reserve to fund worthy causes if needed.

Finally, around 6 PM on Saturday, Tau announced he had signed a Temporary License Agreement with Ithuba Holdings for another year starting June 1, 2025. He stated this agreement ensures continued lottery operations during the transition period between licenses.

Tau also mentioned plans to appeal the NLC's failed appeal and referenced Judge Mooki’s comments supporting his decision-making authority regarding temporary operators.