Lottery operator Ithuba has alleged newly appointed national lottery licence holder Sizekhaya Holdings was awarded the licence despite lacking sufficient financial resources to take over the lottery.
The current temporary lottery operator, which has run the lottery since 2015, alleges this was against the requirements stated in the request for proposal (RFP) for the licence.
This is contained in court papers before the Pretoria High Court, where Ithuba has lodged a review application in its bid to have the awarding of the lucrative lottery licence set aside.
The national lottery is considered the country’s biggest tender, estimated to rake in R180bn over an eight-year period.
In his founding affidavit, losing bidder Ithuba Lottery’s chief operations and financial officer Louis Almero Du Pisanie said Ithuba had raised capital required to take over the fourth national lottery licence and hit the ground running.
“Ithuba Lottery had secured irrevocable funding. Its shareholders committed to provide R280m in capital [amounting to 30% of its capital requirements], and the remaining 70% would be secured through debt financing from Zamani Gaming [one of its shareholders],” Du Pisanie said.
He added they had commitments amounting to R700m from Standard Bank
Du Pisanie said Sizekhaya Holdings needing nine months to prepare for takeover suggested it was not in a position to commence operating the lottery, while Ithuba was ready to do so from June 1 2025.
He said Sizekhaya’s transition plan showed that it was required to secure funding by October 22 2025.
“It appears that Sizekhaya was awarded the licence in circumstances [where] it had not secured fully committed funding prior to the award. If this is not the case, then it is inexplicable why Sizekhaya required more than five months from the date of the award for the licence within which to secure funding, which is not compliant and contradicts the requirements of the RFP,” Du Pisanie said.
He also pointed to reports that Sizekhaya has links to Deputy President Paul Mashatile, whose sister-in-law is reportedly a shareholder in one of the companies that are part of the winning bidder.
Du Pisanie stated Sizekhaya directors Moses Tembe and Sandile Zungu have “close connections with the ANC”.
“Ithuba Lottery is not in a position to confirm the veracity of these reports and does not purport to allege that they are factually correct. The reports nevertheless raise concerns about the award to Sizekhaya,” Du Pisanie stated.
Ithuba, run by businesswoman Charmaine Mabuza, are also current holders of a 12-month temporary licence issued to avoid a lottery blackout as Sizekhaya Holdings prepares to take over in June next year.
The application cited Tau and the National Lotteries Commission as the first and second respondents while seven losing bidders were also cited as the third to ninth respondents.
The minister's explanation was unfortunately vague and did not disclose the specific issues that required further evaluation. However [he] ... implied that some outstanding concerns or irregularities had emerged during the process
— Vladimir Vukovic, Lekalinga founder
This is the second review application against the award after another losing bidder Lekalinga lodged a review application last month, raising questions of possible conflict of interest involving Sizekhaya.
Another losing bidder, Ringeta, has already joined the Lekalinga case, while TimesLIVE Premium has learnt that other bidders were considering their next move as they had begun briefing their lawyers.
Lekalinga founder Vladimir Vukovic said in court papers that Tau “failed to assess indirect financial interests”. This “would constitute material noncompliance” as the National Lotteries Act prohibits political involvement.
He said that according to company records, Sizekhaya and its partner and shareholder Gold Rush had the same registered address.
Vukovic highlighted that Tau had in December decided to postpone announcing the winning bidder, saying he had “identified matters that required further evaluation”.
“The minister's explanation was unfortunately vague and did not disclose the specific issues that required further evaluation. However [he] ... implied that some outstanding concerns or irregularities had emerged during the process,” he said.
Vukovic also raised issues with the licence being issued to Sizekhaya Holdings despite it not being able to set up and run the lottery in the period stated in the RFP document.
South Africa's lottery licence handovers have always been marred by legal challenges, the court being the final arbiter.
Inaugural lottery operator Uthingo challenged second operator Gidani's appointment, while Gidani also tried and failed to get Ithuba's appointment set aside and declared unconstitutional.
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