Sizekhaya says original bid remains valid after lottery licence ruling

COO Fundi Sithebe says the court’s decision concerned the ministerial committee involved in the final selection rather than the company’s qualifications or bid.

Key takeaways:

• The Gauteng High Court set aside the decision of Parks Tau, minister of trade, industry and competition, to award Sizekhaya Holdings the Fourth National Lottery and Sports Pools Licence.
• Fundi Sithebe, chief operating officer of Sizekhaya, said the court made no adverse findings against the company, its financial capacity or the quality of its application.
• Sithebe said the ruling does not require a fresh tender, as the evaluations by the National Lotteries Commission’s bid committees remain valid.
• Tau has six months to reconsider the award, with a further six months for a new licence agreement and transition if another applicant is selected.
• Sizekhaya said the ruling has not affected lottery operations or its arrangements with retailers, banks and other partners.

South Africa.- Sizekhaya Holdings has maintained that it remains eligible to operate South Africa’s National Lottery and is confident of retaining the eight-year licence following a fresh assessment. The company’s position follows a November 2 judgment by the Gauteng High Court, which set aside trade, industry and competition minister Parks Tau’s decision to award it the Fourth National Lottery and Sports Pools Licence.

In an interview with Moneyweb on November 3, Sizekhaya chief operating officer Fundi Sithebe said the court had made no adverse findings against the company, its financial capacity or the quality of its application. She described the ruling as a procedural issue concerning the ministerial committee involved in the final licensing decision, rather than a finding against Sizekhaya’s bid.

Does the ruling require a new tender process?

Sithebe said the ruling did not call for a fresh tender process, noting that the evaluations already conducted by the National Lotteries Commission’s Bid Evaluation Committee and Bid Adjudication Committee remained valid.

The court directed the minister to exclude the committee’s report and recommendations from his fresh assessment of the licence applications. According to Sithebe, the original bidding process involved three shortlisted applicants, and Sizekhaya expects the minister to consider the existing evaluations when making a fresh decision. She said the company believed its application had performed well against the requirements and hoped the reconsideration would produce the same outcome.

Are National Lottery operations affected by the ruling?

Sizekhaya also confirmed that the court ruling had not affected its operations or arrangements with business partners. Sithebe said the company had communicated with retailers, banks and other partners to confirm that lottery services would continue as usual. She added that the court had considered the consequences of interrupting lottery operations, particularly for organisations that receive funding through the National Lottery Distribution Trust Fund.

Sithebe also pointed to the operational difficulties that could arise if another company eventually receives the licence. She noted that previous changes in National Lottery operators had required considerable preparation, including establishing the systems and infrastructure needed to manage the business.

What happens next with the licence decision?

The court has given Tau six months to reconsider the award. If he selects another applicant, a further six-month period will allow the government to negotiate a new licence agreement and establish transitional arrangements. Sithebe said Sizekhaya would comply with the minister’s eventual decision but remained optimistic about retaining the licence.

Frequently asked questions (FAQs)

• Why did the court set aside Sizekhaya’s National Lottery licence? The Gauteng High Court set aside the award over the role of the ministerial committee involved in the final selection. Sizekhaya said the ruling was procedural and made no adverse findings against the company or its bid.
• Will there be a new tender for South Africa’s National Lottery licence? According to Sizekhaya, no. Sithebe said the court did not call for a fresh tender process and that the evaluations by the National Lotteries Commission’s Bid Evaluation and Bid Adjudication committees remain valid. The minister must exclude the ministerial committee’s report from his fresh assessment.
• How long does the minister have to reconsider the licence award? Parks Tau has six months. If he selects another applicant, a further six-month period will allow the government to negotiate a new licence agreement and establish transitional arrangements.
• Is South Africa’s National Lottery still operating? Yes. Sizekhaya said lottery services continue as usual and that it has informed retailers, banks and other partners that the ruling has not affected its operations.