Tensions are brewing in South Africa as the fate of the national lottery license remains unclear under the leadership of Parks Tau.
Tau, who is the Minister of Trade, Industry and Competition, appears to have brought confusion to the licence tender process which must be fulfilled to replace the current licence holder, Ithuba.
Local media reports that the Minister has transgressed from what started as a search for a 12-month temporary licence granting to aid the transition from Ithuba, which is set to surrender its rights to the national lottery on 31 May.
Reports suggest that Tau has now informed approved bidders that he is seeking an entity to permanently take over South Africa’s national lottery and sports pools for the next eight years.
Legal battles ensue
Criticism has started to pile up, accusing the Minister – serving under the GNU coalition government – of nefarious intentions that are beneficial for Ithuba.
There’s already been some legal fallout from the unprecedented scenario, with one bidder – Wina Njalo (RF) Pty Ltd – creating a court bid in an effort to push for an expedited decision in the granting of the licence, which is estimated to generate $9.8bn over the eight-year period.
In the statement, the company said that Tau’s actions have been “entirely irrational” and that a cause for concern of an “ulterior purpose” is at hand.
As of now, Tau remains firm in his stance, with media outlet GroundUp reporting that he plans “to announce the identity of the successful applicant after negotiations regarding the licence have been concluded to my satisfaction”. The bid process has also been supposedly extended with one more year to accommodate Tau’s decision making.
However, more legal repercussions could follow suit, with the opposition party Build One South Africa (BOSA) publicly reprimanding the developing situation.
On X (formerly Twitter), party officials were quoted as saying: “The extension, which involves the single largest tender in South Africa raises serious concerns about legality, transparency, and fair competition.”
BOSA’s Deputy Party Leader, Nobuntu Hlazo-Webster MP, added: “The circumstances surrounding this new license were questionable under the last administration and remain so under the GNU government.”
Ithuba was first granted the eight-year license in 2015. In May 2023, however, the licence was extended by Tau’s predecessor, Ebrahim Patei. This was based on a report from South Africa’s National Lotteries Commission (NLC) that Ithuba’s earnings and overall performance was dragged down by the COVID-19 outbreak.
The NLC itself was placed under investigation by the Special Investigation Unit earlier in February due to alleged corruption and money laundering.
As it stands, with Ithuba’s licence set to legally expire on 31 May, and no replacement having been found yet, lottery ticket sales will no longer be available for purchase from June onwards.