The Pretoria high court has ordered the trade, industry and competition minister to determine the successful applicant for the fourth national lottery licence by no later than May 28.
The court on Wednesday ordered the minister to negotiate a licence agreement with the successful fourth licensee by no later than May 28. The court also declared as unlawful and invalid the minister's decision to extend the bid validity period for the fourth national lottery licence by an additional 12 months, until May 31 2026.
Wina Njalo, one of the bidders for the fourth national lottery licence, launched an urgent application in March after minister Parks Tau informed the bidding parties in February that he intended to extend the bid validity period. The third national lottery licence is set to expire on May 31.
“Wina Njalo avers that the urgency lies herein that the third licence expires on 31 May 2025 with the minister failing to award the fourth licence. With the [Lotteries] Act barring an extension of the third licence, without court intervention, there will be no operator for the national lottery after 31 May 2025,” said judge Sulet Potterill in her judgment summarising the bidder's submissions.
In terms of the timeline set out in the request for proposal (RFP) for the fourth lottery licence, the minister was to announce the successful bidder by September 2 2024, and the minister and the successful bidder were to conclude and sign a licence agreement by December 13 2024. The commencement of transition and handover period from incumbent Ithuba to the new operator was supposed to start in June 1 this year.
In February 2024 the National Lotteries Commission (NLC) received eight applications in response to the RFP. In September last year, the evaluation committee's report was delivered to the NLC. The NLC concluded its adjudication and reported to the minister on October 11 2024.
In December last year, the minister advised that he was not in a position to make a final decision regarding the successful applicant. On March 4, the temporary licence RFP was published.
The NLC had recommended the extension of the bid validity period for one year and advised the minister that the period between February and June was insufficient to allow for the proper selection of a successful applicant for the fourth national lottery.
Wina Njalo wrote a letter to the minister on March 5, stating that the temporary licence RFP afforded only Ithuba the opportunity to be a successful bidder.
The minister, the NLC and Ithuba argued that the application by Wina Njalo was not urgent. However, Potterill said the relief sought by Wina Njalo was manifestly urgent.
The announcement of the award should have been done by 2 September 2024. The decision to extend the bidding process and the temporary licence RFP are indicative thereof that the decision is not imminent.
— Judge Sulet Potterill
“The announcement of the award should have been done by 2 September 2024. The decision to extend the bidding process and the temporary licence RFP are indicative thereof that the decision is not imminent,” Potterill said.
She said the absence of a designated licensee beyond the expiry date created a risk of operational disruption with potentially severe consequences for beneficiaries and the broader public.
Wina Njalo, which was represented by Nortons Inc, had argued that the minister had not taken a decision as required by the fourth licence RFP within the time-frame set to take such a decision. The minister maintained that the decision-making process was complex and sensitive, involving the appointment of the quality assessment committee after the NLC board had concluded its adjudication, consultations with the NLC board and ongoing evaluative processes.
“He contended that a delay occasioned by the need for thorough and responsible consideration does not constitute a failure or refusal to decide,” Potterill said when summarising the minister's argument.
Potterill said the minister had not set out justifiable reasons for the delay in awarding the licence and it was expected of the minister to set out full and frank explanations that would enable a court to assess their adequacy when determining whether an administration had acted reasonably.
“It follows that the delay in the non-award decision and the failure to provide reasons, the minister must be found to have breached the provisions of ... Promotion of Administrative Justice Act. The same facts lead to the conclusion that the minister did not fulfil his constitutional duty. On either basis, the non-decision must ... be declared invalid,” Potterill said.
The court also ordered that the costs of the application, including the cost of three counsel must be paid by the minister, the NLC and Ithuba Lottery.
Wina Njalo CEO Dawid Muller welcomed the judgment and said it justified the company's reasons for going to court.
“This is a resounding victory. The message is clear: the minister cannot delay making a decision for many months without giving reasons,” Muller said.
Tau's spokesperson Yamkela Fanisi said the minister had not been able to study the judgment and would comment after legal consultations.
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