Minister Tau sets deadline for lottery operator announcement
It might take six months for the new operator to finish setting up its infrastructure.
South Africa.- Minister of Trade, Industry, and Commerce, Parks Tau, has reportedly confirmed that he will announce the winning bidder for the South African lottery and sports pool operation on or before May 28, 2025.
The announcement comes barely weeks after the minister issued a request for proposals for a temporary lottery operator licence, a move that had generated criticism and concerns about the transparency and fairness of the licensing process.
Tau’s latest decision was communicated to approved bidders through a virtual data room last Wednesday. In the notice, which is yet to be made public, the minister stated that he plans to reveal the identity of the successful applicant after licence negotiations met his approval.
However, Tau also reminded the bidders of a crucial clause in the Request for Proposal (RFP), which allows him to negotiate with the next best applicant if talks with the highest bidder break down.
Ithuba is the current national lottery operator. However, its license is set to expire on May 31. Beginning in 2015, the company has overseen the national lottery for almost a decade. While its initial eight-year license should have expired on May 31 2023, the company received a 24-month extension due to the impact of Covid-19 on its revenue.
Lottery ticket sales may be suspended
Had Tau’s temporary licence proposal been implemented, an interim operator would have overseen the lottery for 12 months, starting from June 1 after Ithuba’s exit.
However, now, lottery ticket sales are likely to be put on hold from May 31 until the new operator sets up its technical infrastructure.
A representative from one of the companies vying for the licence said: “It takes six months to transition between operators. The new operator runs parallel to the old one. There is a lead time to manufacture the machines [lottery ticket sales equipment]. You also need to have data centres, etc., set up so that when the switchover to the new operator happens, you are ready.”
A faster solution would be for Ithuba to retain the licence. However, that move may trigger a barrage of legal actions from disappointed bidders. The minister has already been accused of delaying the awarding of the fourth licence to favour Ithuba.
Even if lottery ticket sales are suspended, it won’t affect the National Lotteries Commission (NLC), which has a substantial R4.3 billion (€208m) reserve fund to draw from. This would allow it to continue supporting charitable initiatives and covering operational expenses until the new lottery operator starts generating revenue.
