Lottery Licence Decision Delayed Amid Corruption Allegations and Political Links

Trade and Industry Minister Parks Tau has delayed announcing the new operator for South Africa’s National Lottery, leaving uncertainty over its future as the current operator, Ithuba, approaches the end of its extended licence in May 2024.

Ithuba’s licence was initially set to expire in May 2023 but was extended for two years by then-Minister Ebrahim Patel. The extension followed a request from the National Lotteries Commission (NLC), which was battling extensive corruption allegations. Ithuba had cited the economic impact of the COVID-19 pandemic, including a temporary ban on lottery ticket sales, as a reason for the extension.

The extension required Ithuba to increase its contributions to the NLC’s fund for good causes. However, the delay in naming a new operator now raises concerns about a seamless transition. New licence holders typically need six months to establish infrastructure and systems, making further extensions unlikely.

Allegations Cloud Licence Bidding Process

The bidding process for the next licence has been marred by allegations of conflicts of interest and political connections among the shortlisted contenders.

Business Day reported that most bidders are politically exposed. These include:

• Gold Rush Consortium: Led by businessman Sandile Zungu, who previously contested for the ANC KwaZulu-Natal chairmanship.
• HCI: Majority-owned by the South African Clothing and Textile Workers’ Union, an affiliate of ANC-aligned Cosatu. CEO Johnny Copelyn previously donated to President Cyril Ramaphosa’s CR17 campaign.
• Thebe Investment Corporation: Founded by ANC leaders in 1992, Thebe has donated R60 million to the ANC since 2021 through Batho Batho Trust, its half-owner.
• Giya Games: Associated with consultant Vivien Natasen, who faced allegations of questionable payments linked to the NLC.

Ithuba, the current operator, and the Umbulelo Consortium, led by Afrirent Holdings, are also in the running.

Contingency Plans in Place

With the possibility of ticket sales being halted, the NLC has contingency measures to ensure funding for good causes continues. Reserves of R3.9 billion will be used to support qualifying organizations for up to a year, even in the event of litigation by losing bidders.

Tau Seeks Further Evaluation

In a weekend statement, Tau emphasized the need for thorough evaluation before finalizing a decision:

“Unfortunately, I am not in a position to make a final decision at this stage. Any such decision at this time would, in all good conscience, mean that I have not applied my mind with due consideration of all the relevant factors,” –  he said.

Tau highlighted the importance of ensuring that applicants are “fit and proper persons” and free from political party or office-bearer interests.

He added that advice from the National Treasury would guide the interim continuation of the lottery while the licensing process is finalized.

The delay underscores the challenges of balancing transparency, governance, and operational continuity in managing South Africa’s National Lottery.

Source: iafrica.com

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Szarlot

I am a fan of casino games especially roulette and blackjack. After that I analyze current events in the gambling industry.

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Szarlot

I am a fan of casino games especially roulette and blackjack. After that I analyze current events in the gambling industry.