Ithuba, South Africa's current national lottery operator, has written to parliament urging that “severe misconceptions” about its eligibility to run the lottery be addressed.
Ithuba Holdings was awarded a temporary lottery licence to run the Lotto for the next 12 months while its related entity, Ithuba Lottery, had applied for the fourth national lottery licence, which was awarded to Sizekhaya Holdings.
There was speculation about Ithuba Holdings' eligibility to be awarded the national lottery after it ran it for the last decade. It was granted a two-year extension when its eight-year term ended in 2023.
The Lotteries Act stipulates that a national lottery licence can only be valid for a maximum of eight years and may be extended once for two years only.
CEO Charmaine Mabuza wrote to parliament's portfolio committee on trade, industry and competition in a bid to “address several misconceptions that have emerged regarding the current South African national lottery licence process”.
Mabuza, in a letter addressed to committee chairperson Mzwandile Masina, which TimesLIVE Premium has seen, said she found it essential to raise the matter with the committee, as it was responsible for overseeing the processes of the awarding of the national lottery licence.
“We recognise the esteemed positions held by members of parliament in society, and the significant impact their opinions can have on public discourse regarding this issue [of Ithuba's eligibility for the fourth lottery licence and being awarded the temporary licence],” wrote Mabuza.
She said only Ithuba Holdings was not “legally qualified to bid” for the fourth national lottery licence.
“But Ithuba Lottery, a separate entity, was fully entitled to bid regardless of the fact that it shares a number of directors with Ithuba Holdings. There's no irregularity here,” Mabuza stated.
She supported minister Parks Tau's argument that the temporary licence which was awarded to Ithuba Holdings was to prevent a disruption in lottery operations.
Tau averted a lottery blackout when he granted Ithuba Holdings a 12-month temporary licence just a few hours before their licence expired. This was despite that Ithuba Holdings had not applied for the temporary licence.
It was Ithuba Lottery that had applied for a temporary licence. Tau, who is appealing a court ruling that prevented him from issuing a 12-month temporary licence, is yet to divulge his reasons for Ithuba Holding's appointment as opposed to Ithuba Lottery.
Mabuza, however, threw her weight behind Tau's argument, stating in her letter to Masina that: “He [Tau] did this by relying on his statutory powers and advice from the NLC, as well as two court judgments.”
She also shot down suggestions that Ithuba was 'favoured' by Tau, an argument brought before the courts by Wina Njalo, one of the losing bidders for the licence.
“The minister ... has unequivocally denied any favouritism towards Ithuba. In his leave to appeal the court ruling that annulled his decision to grant a 12-month temporary licence to Ithuba, the minister emphasised that the conditions... were 'unavoidable and natural' within the context of the specialised lottery industry,” Mabuza stated.
Masina confirmed receipt of Mabuza's letter, saying he has “shared it with the legal team in parliament”.
“The committee will be meeting on June 24 to discuss all [national lottery] matters. At this point, I don't have any personal view,” Masina said.
Asked about the unfolding legal battle, Masina said: “It was expected since there's seemingly a lot at stake and we want responses to the questions we asked in parliament as the committee.”
Mabuza also stated that the negotiations that took place between Tau and Ithuba on the conditions of the temporary licence were necessary “to ensure that a mechanism could be found to keep the lottery functioning and to ensure ticket sales”.
Tau's appeal means the court ruling is held in abeyance until the appeal outcome is reached.
Wina Manje has already indicated that it would be opposing Tau's appeal as the continuation of the Lotto now hinges on its outcome.
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