Trade, industry & competition minister Parks Tau will be met with a national lottery crisis when he returns from his work trip to the US, with SA set to be without a lottery from June after a Pretoria high court judgment.
Wina Njalo, an offshoot of JSE-listed Hosken Consolidated Investments, dragged Tau to court to compel him to announce a bidder before end-May and invalidate the decision to issue a temporary licence.
Tau, who took office when the process was at an advanced stage in December, delayed appointing a preferred bidder after raising concerns about the evaluation process.
He said he needed to ensure no “political party or political office-bearer has any direct financial interest in the applicant or a shareholder of the applicant”.
To this end, Tau decided to extend the validation period of the tender, and issue a temporary licence to ensure the lottery is uninterrupted, while he makes his decision.
The decision of the high court on Wednesday invalidated Tau’s decision to issue a request for proposal (RFP) for a 12-month temporary licence.
The court also found Tau’s decision to extend the validation period for the fourth licence to operate the national lottery to be unlawful and ordered him to appoint a preferred bidder before May 28.
However, the court suspended its order to declare the RFP for a temporary licence unlawful for five months, saying it was the time required to allow the preferred bidder to prepare to run the lottery.
“I think that a just and equitable remedy will be to set aside the temporary licence RFP, but to suspend this part of the order to enable the continuation of the operation of the national lottery. I am unconvinced that the period of 12 months argued for is necessary,” judge Sulet Potterill ruled.
“The five months for the licence to be operational seems the time period to be the consideration,” Potterill ruled.
However, Business Day understands that despite the court’s best intentions to keep the lottery running until a new licensee takes over, the five months the court found to be a reasonable time for the temporary licence makes it a financial nonstarter for the bidders.
This is because about R100m in capital expenditure is needed for the temporary licence, and no bidder is prepared to spend that much for a five-month licence, about which Tau and the National Lotteries Commission (NLC) had warned the court.
The licence of incumbent Ithuba, which was awarded the third licence to operate the lottery, ends at month-end.
About five to six months is needed for a new operator to take over the lottery, hence Tau opted to issue a temporary licence as he grappled with to whom to award the permanent licence after a contentious tender process.
Business Day reported last week Tau was in negotiations with the Goldrush Consortium to take over the lottery after he picked the outfit as the preferred bidder.
According to a process outlined by Tau to all eight bidders, he would first negotiate and agree terms with his preferred bidder before publicly naming them.
The Goldrush Consortium is led by KwaZulu-Natal businesspeople Moses Tembe and Sandile Zungu.
The Goldrush bid has not been without controversy. City Press reported in 2024 Thiran Marimuthu, who sits on the NLC’s licence bid evaluation committee, has close links with the Goldrush Consortium and attended its 25th anniversary in November 2024.
Another bid evaluation member, Anne-Marie Pooley, in 2024 invested in an establishment in Pretoria, Route 515 Pub and Grill, which houses Goldrush slot and gaming machines.
Zungu challenged the ANC KwaZulu-Natal chair position in 2022 before dropping out due to a lack of support.
The EFF has threatened Tau with legal action should he appoint Goldrush.
Business Day has it on good authority that losing bidders are also preparing to challenge the process followed in the tender process.
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