The race is on for the licence to operate the national lottery, with operator Ithuba and Hosken Consolidated Investments (HCI) first out of the blocks to compete for the lucrative contract valued at R150bn-R250bn.
After a two-year delay, the department of trade, industry & competition has published a request for proposals for the fourth licence to operate the lottery.
The request for proposals, gazetted last week, invited interested bidders to purchase proposal documentation from the National Lotteries Commission between the end of August and October 31. The final date for the submission of completed applications is midday on February 3 2024.
Ithuba, the licence holder, has confirmed it will bid for the renewal of the contract, which it was awarded in 2015. Its contract was set to lapse at the end of May but has been extended to May 31 2025, due to delays in initiating the tender process.
If Ithuba is successful in retaining the licence to operate the national lottery, which generates revenue on behalf of the National Lotteries Commission, it would be the first company to do so since the award of the first licence in the late 1990s.
Previous operators Uthingo and Gidani were unsuccessful in retaining their licences for a second term.
Ithuba, headed by Charmaine Mabuza, will face off with a familiar foe in HCI, worth about R20bn on the JSE. HCI, majority owned by the SA Clothing and Textile Workers Union, has also confirmed that it will bid for the licence.
HCI is run by trade unionist turned business person Johnny Copelyn. When contacted for comment, he referred Business Day to the group’s annual report released two weeks ago. In that report Copelyn informs shareholders of the company’s interest in getting the licence to operate the lottery in SA.
‘Exciting bid’
“We have put together an exciting bid ... designed to incorporate the top end of technology available in the industry and to use the specialised knowledge base of our subsidiaries and associated companies,” he said in a letter to shareholders.
HCI, which Copelyn has headed since 1997, has interests in media and broadcasting, gaming, transport, properties, coal mining, and oil and gas.
HCI and Ithuba are no strangers to rivalry over the lucrative contract, having engaged in a lengthy court battle over the control of the third licence. At the heart of the dispute was a multimillion-rand loan that HCI granted to Ithuba in 2015 when it won the contract to operate the national lottery.
HCI stepped in to provide investment capital of R325m after Ithuba struggled to get funding from banks. This was due to a legal challenge from erstwhile lottery operator Gidani, which wanted the courts to set aside the government’s decision to award Ithuba the licence to operate the lottery.
The agreement between the two entities ran into problems when HCI wanted to activate “step in” rights in terms of the agreement, a move which would have essentially seen HCI take control of Ithuba. HCI and Ithuba later called off their court battles after a R400m settlement in favour of HCI was reached.
The race to win the fourth licence is unlikely to be a two-horse race, with other entities expected to show interest.
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