The National Lotteries Commission (NLC) has launched an “extremely” urgent bid to avoid a nationwide shutdown of the popular national lottery come Sunday, saying this would deplete resources meant for good causes by about R2bn.
The NLC, in its affidavit filed with the Pretoria high court on Monday is asking the court to amend its order that the temporary licence issued by the minister of trade, industry & competition in March was invalid.
The judgment, whose order was suspended for five months put a spanner in the works as the preferred bidder for the 12 months temporary licence, Ithuba, is unwilling to invest millions of rand for a five month contract which will lead to substantial losses, according to the NLC.
To this end, NLC chair Barney Pityana said should the court not vary its order to accommodate for a 12 months temporary licence while the preferred permanent licence bidder readies itself to assume operation of the nearly R100bn tender, the lottery will be suspended for at least nine months.
This is because, according to Pityana, the preferred bidder for the fourth licence, believed to be a Goldrush consortium, has said it will only be in a position to take over the running of the lucrative business in nine months’ time.
The licence of incumbent Ithuba expires at midnight on Saturday.
“Should there be interruption in the operation of the National lottery, the National Lottery Distribution Trust Fund (NLDTF) would have to be utilised in the transition period to fund good causes,” Pityana said in the affidavit.
“Such interruption will substantially deplete the reserves of the NLDTF ... an interruption will also exacerbate the threats of illegal gambling ... it will result in a loss of R1.79bn [excluding VAT) in funding of good causes through the contributions to the NLDTF,” he said.
Pityana said Ithuba has already indicated that it is not willing to enter into a loss making five month temporary licence.
Ithuba, according to Pityana’s papers, had already secured equity contribution from its shareholders and R100m from its funders to roll out the temporary licence for 12 months.
“Ithuba’s financial model was assessed and stress-tested by financial experts appointed by the assessment committee,” Pityana said.
“The experts confirmed that Ithuba will be a viable business that is able to repay the loan funding to its funders and render a return on investment to its equity funders over a 12-month temporary licence period,” he said, but that a five month contract will lead to Ithuba recording a loss of about R51m.
Goldrush’s imminent appointment is set to be challenged in court with the EFF having already indicated its intention to oppose its appointment.
Business Day understands most of the other seven losing bidders are also set to challenge Goldrush’s appointment — events that might lead to possible delays in its eight year licence.
Pityana said this was a real possibility which bolsters the commission’s position that a temporary licence of at least 12 months was the most appropriate cause of action.
“The NLC considered seeking an order to extend the suspension period strictly for nine months. But such an extension may mean there is still no temporary licensee to continue lottery operations from June 1 as Ithuba is likely to decline the appointment for nine months,” he said.
“In the event of litigation to try to stop the takeover of lottery operations by the fourth licensee [Goldrush], the risk of interruption will also exist.”
NLC has asked that its application be heard before Friday.
Parks Tau, the minister of trade, industry & competition, inherited a poisoned chalice when he took over office a year ago, finding the processes to evaluate the fourth licence at an advanced stage with the lion’s share of the processes having been overseen by his predecessor, Ebrahim Patel.
One of the entities vying for the tender is a consortium made up of Thebe Investments, 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 Hosken Consolidated Investments’ (HCI) offshoot Wina Njalo. HCI 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. Patel is a former Sactwu secretary-general.
Goldrush’s bid has also not been without its own controversy.
Business Day revealed last year that Anne-Marie Pooley, who is part of the team assembled by the NLC to adjudicate on the hotly contested tender is invested in an establishment in Pretoria, Route 515 Pub and Grill, which houses the slots and gaming machines of Goldrush.
The investment was made while the tender was adjudicated on.
City Press has also previously reported that Thiran Marimuthu, who also sits on the NLC’s licence bid evaluation committee, has close links with the Goldrush Consortium and attended the 25th anniversary organised by it in November 2024.
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 friend and associate of Zungu.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.