Confusion over future of South Africa’s national lottery amid regulatory scandal
The current national lottery licence expires in less than three months.
South Africa.- The future of South Africa’s national lottery remains in doubt amid contradictory claims regarding a possible request for proposals. Ithuba’s current lottery licence expires in less than three months on May 31, leaving a possibility that ticket sales could be interrupted.
It was reported that trade, industry and competition minister Mpho Franklyn Parks Tau had issued a closed request for proposals (RFP) for a temporary one-year licence. The news agency GroundUp claims to have seen a copy of the document, which was reportedly sent to already approved bidders. However, the chair of the National Lotteries Commission (NLC) and its acting chief operating officer have both denied that an RFP has been issued.
The Lotteries Act allows the minister to extend a licence once for 24 months. Ebrahim Patel, who previously occupied the post, already extended Ithuba’s licence for two years from May 31 2023 to May 31 2025. However, the act also allows the minister to issue a temporary licence in certain circumstances, including if the licence is suspended for whatever reason.
In an appearance by the NLC before parliament’s trade, industry and competition portfolio committee, Democratic Alliance MP Toby Chance said he had “reliable information” that an RFP had been issued, but Park Tau’s spokesperson said the minister had not issued anything relating to a temporary licence and NLC chief operating officer Nontombi Matomela also said she was unaware of any RFP.
NLC Commissioner Jodi Scholtz told the committee that the NLC had contingency plans to use its reserves of R4.3bn to continue issuing grants to good causes and to cover its own costs if ticket sales are halted.
Tau previously said the bid period would be extended because additional evaluation was needed to ensure a fair process and to check that the successful applicant met legal and ethical requirements. He said: “I must also ensure that the owners and managers of the successful applicants are, as the Act states, ‘fit and proper persons’. In addition, I must ensure that no political party or political office-bearer has any direct financial interest in the applicant or a shareholder of the applicant.”
In the meantime, potential bidders are reportedly angry about the delay and are said to be exploring legal recourse. A successful bidder could normally expect to have six months to prepare for a transition of the lottery operation in which to set up infrastructure. It’s been suggested that the short time left before the current licence expires now means that only the incumbent would be ready to continue running the lottery.
Meanwhile, the Democratic Alliance (DA) has proposed the creation of a department-wide policy on whistleblower compensation amid a corruption scandal at the NLC. Whistleblowers were dismissed from the regulator after revealing that grants worth R2 billion may have been funnelled back to senior members of the NLC.
In March 2024, the Special Investigation Unit (SIU) received an interdict from the Special Tribunal to halt the sale of a farm linked to former NLC chief operations officer Phillemon Letwaba and his brother. However, Letwaba is challenging the constitutionality of the Special Tribunal’s power to freeze assets. Former board chair Alfred Nevhutanda has challenged a proclamation signed by President Cyril Ramaphosa authorising the SIU to probe the corruption allegations. Both cases could take years to pass through the courts.
