Legal challenge filed against South African national lottery decision

The incumbent Ithuba Holdings has challenged the decision to award the new licence to Sizekhaya.

South Africa.- Ithuba Lottery, a bidder affiliated with long-time South African lottery operator Ithuba Holdings, has filed a legal challenge agaisnt minister Parks Tau’s decision to award the country’s fourth national lottery licence to Sizekhaya Holdings. It claims that Sizekhaya failed to meet key requirements under the tender process around secured funding and the ability to ensure a smooth operational handover.

The bidding terms mention a requirement for an immediate and seamless transition by the successful applicant, with confirmed financing in place. In its filing at Pretoria High Court, Ithuba argues that Tau’s use of discretionary powers under the National Lotteries Act to grant a provisional 12-month extension to Ithuba Holdings demonstrates that Sizekhaya wasn’t able to meet that condition.

The legal action follows another challenge lodged by Serbia-based bidder Lekalinga. Both companies have requested that Tau outline the full reasoning behind his selection. Tau finally confirmed Sizekhaya’s selection on May 28, eight months later than expected and just two days before Ithuba Holdings’ licence expired on June 1.

Other bidders objected to the decision to grant an interim provisional licence, and Ithuba Lottery was the sole applicant willing to operate under its conditions. At one point the interim period was reduced to five months, prompting even Ithuba to withdraw as it argued that the short time period would make the extension financially not viable. Tau then intervened to extend Ithuba Holdings’ licence for a full year to prevent disruption to lottery operations.

Ithuba Lottery’s chief operations and financial officer Louis Almero Du Pisanie has called for the licence award to be reassessed. He claims that Ithuba’s bid outperformed all competitors on merit and readiness and also raised concerns about the proximity of Sizekhaya’s shareholders to key ANC figures.