Trade, industry & competition minister Parks Tau has told bidders vying for the lucrative national lottery that it must not be disrupted while the delayed process to award the new licence unfolds.
One of the bidders, Wina Njalo, an offshoot of JSE-listed group Hosken Consolidated Investments (HCI), has approached the courts to force the minister to award the fourth licence — and an order declaring unconstitutional and unlawful the request for proposals for the temporary licence.
The matter is due to be heard later this month.
Tau, through the state attorney’s office, told Wina Njalo that his priority is to make an award before the end of next month and that he was proceeding with the procurement of a temporary licence for a period of 12 months.
Then six months in the role, Tau in December declined to award the preferred bidder for the eight-year contract, said to be worth nearly R90bn.
The process of selecting a bidder has been highly tainted, marred by conflicts of interest.
The delay in naming the bidder for the fourth national lottery licence occurred after Tau said he had identified “matters that require further evaluation”, stating that the law required him to ensure that no political party or political party office bearers have a financial interest in the applicants.
Tau followed this up by extending the validation period of the tender and issuing a closed request for proposals for a temporary licence to run the national lottery for a year when the current licence expires in May — with the decision on the temporary licence expected before the end of this month.
Tau’s lawyers, in a letter to Wina Njalo dated April 1, said he would forge ahead with the temporary licence.
“In short, the extension of the bid validity period may be necessary if the process for awarding the fourth licence cannot be concluded, for whatever reason, by May 31 2025. The temporary licence may be necessary for the same reason,” reads the letter.
“In addition, the temporary licence may be necessary even if the process of awarding the fourth licence was concluded by May 31 2025, but the successful applicant cannot, for legitimate reasons, begin operations immediately. The minister wishes to avoid a situation where there is no lottery in place.”
Business Day has through a series of articles revealed how politically connected entities were in the running to win the lucrative tender.
One of the associations vying for the tender, said to be north of R87bn, is the Ringela Consortium, led by Thebe Investments and Absa chair Sello Moloko’s investment company, Thesele Group.
Thebe Investments is half-owned by ANC benefactor Batho Batho Trust which, according to declarations made to the Electoral Commission of SA, has donated R60m to the ANC since 2021.
Batho Batho Trust was founded by ANC leaders in 1992.
Another bidder is HCI, which is majority-owned by the SA Clothing and Textile Workers’ Union (Sactwu), an affiliate of Cosatu, which is in alliance with the ANC.
HCI is run by trade unionist turned-businessman Johnny Copelyn, who donated to President Cyril Ramaphosa’s CR17 campaign for the ANC presidency. Former minister of trade, industry & competition Ebrahim Patel is a former Sactwu secretary-general.
HCI’s subsidiary Vukani Gaming is already a sizeable player in the casino space. Business Day revealed last year that a former senior employee of Vukani Gaming, Anne-Marie Pooley, is part of the team assembled by the National Lotteries Commission to adjudicate on the hotly contested tender.
But her relationship with one of the bidders, HCI, is not at arm’s length. Her CV shows that in 2006-13 she held the position of national compliance manager at Vukani Gaming, wholly owned by the JSE-listed HCI. Pooley’s LinkedIn page suggests she then held the role of GM at the company in 2014-17.
Pooley’s association with one of the bidders of the fourth national lottery licence does not end with HCI. Business Day has established that Pooley last year invested in an establishment in Pretoria, Route 515 Pub and Grill, which houses the slots and gaming machines of Goldrush, which is also vying for the national lottery contract.
Business person Sandile Zungu is part of the Goldrush consortium — with a minority stake in it.
Zungu in 2022 made a bid to chair the ANC’s biggest province, KwaZulu-Natal, eventually dropping out of the race.
Another high-profile business-person in the Goldrush Consortium is KwaZulu-Natal’s Moses Tembe — a close personal friend and associate of Zungu.
Current licence holder Ithuba is also in the running.
The government, too, has skin in the game, holding a 20% stake in the licence — benefiting from dividends paid by the operator. The government’s stake is held via the National Empowerment Fund — which Ithuba has paid more than R200m in dividends since 2015.
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