Minister Tau under fire over South Africa’s national lottery licence delays

South Africa’s Trade, Industry and Competition Minister, Parks Tau, is facing accusations of deliberately slowing down the process of awarding the fourth national lottery licence, to allegedly benefit the current licence holder, Ithuba.

Just weeks after putting out a tender for a temporary lottery operator licence, Tau now seems to have changed course. He’s reportedly pulled back and says he’ll soon announce who’ll be running South Africa’s national lottery and sports pools for the next eight years “on or before Wednesday, 28 May 2025.”

Tau shared his decision through a notice posted on the virtual data room platform, a private channel used to communicate with approved bidders. The specifics of his decision, which haven’t been made public yet, were shared there last Wednesday (Mar. 26).

With Ithuba’s licence set to expire on May 31, the plan to appoint a temporary operator for the 12-month period starting June 1 appears to be off the table.

GroundUp reports that Tau wrote in a notice that he plans “to announce the identity of the successful applicant after negotiations regarding the licence have been concluded to my satisfaction.”

He also pointed bidders to a specific clause in the Request for Proposal (RFP), saying:

“Should negotiations on the final terms of the licence fail to be concluded to the satisfaction of the minister, the minister reserves the right to negotiate with the next ranking applicant unless there are objective grounds for the minister to negotiate with another applicant.”

Tau under pressure over ongoing delays

This comes as Tau faces legal pressure over the delay. In an urgent court bid to push him to award the lucrative licence, estimated to be worth around R180 billion ($9.8 billion), bidder Wina Njalo (RF) Pty Ltd didn’t hold back.

They argued the minister’s handling of the situation is “so entirely irrational that it can give rise to only one conclusion: that the Minister is actuated by an ulterior purpose and is acting in a manner which will advance the interest of one party – Ithuba.”

The company, which is a subsidiary of Hosken Consolidated Investments, says the delay in awarding the fourth licence is a serious concern. It also criticizes the minister’s “irrational and unlawful” decision to extend the bid evaluation process by another year.

In addition, the company takes issue with the decision to issue a new request for proposals for a 12-month “temporary licence.” According to the company, these actions are threatening the very existence of the national lottery.

Legal action over national lottery licence decisions

Tau was already facing potential legal action from the opposition party, Build One South Africa (BOSA). In a statement, a spokesperson said:

“The extension, which involves the single largest tender in South Africa—valued at nearly R200 billion over five years—raises serious concerns about legality, transparency, and fair competition.”

Nobuntu Hlazo-Webster MP, the deputy leader of BOSA and a member of Parliament’s Trade, Industry and Competition Portfolio Committee, also weighed in:

“The circumstances surrounding this new license were questionable under the last administration and remain so under the GNU government.”

Late last month, Tau extended the bid adjudication period by a year but was silent on what would happen to ticket sales after Ithuba’s licence expired.

It appears that lottery ticket sales will be suspended from midnight on May 31, when Ithuba’s licence officially expires.

Ithuba was first awarded the eight-year licence in June 2015, with its total value estimated at between R60 billion ($3.3 billion) and R65 billion ($3.5 billion) over the full term. Just before that licence was set to expire on May 31, 2023, then-Minister Ebrahim Patel extended it by another 24 months. The extension came after the National Lotteries Commission (NLC) argued that Ithuba’s earnings had been negatively impacted by the Covid pandemic.

Source: readwrite.com

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Samuel

I am a journalist specializing in gambling in Africa and around the world. I am particularly interested in stories about games and casinos.

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Samuel

I am a journalist specializing in gambling in Africa and around the world. I am particularly interested in stories about games and casinos.