By Lehlohonolo Lehana.
Trade, Industry and Competition Minister Parks Tau has postponed his decision on the awarding of the fourth National Lotteries license.
The tenure of current operator, Ithuba, ends in May next year.
Ithuba’s licence was due to have expired in May 2023 but was extended for two years by Tau’s predecessor Ebrahim Patel after a request by the then newly-appointed board of the National Lotteries Commission (NLC).
In terms of the extension, Ithuba had to make contributions to the NLC for distribution to good causes at a higher rate than provided for in their initial licence.
New licence operators are given six months to set up infrastructure, including ticket machines countrywide, to take over from the previous operator before the incumbent’s licence ends.
The shortlisted companies are the Gold Rush consortium is led by high-profile businessperson Sandile Zungu, JSE-listed Hosken Consolidated Investments (HCI), which is majority-owned by the South African Clothing and Textile Workers’ Union, an affiliate of Cosatu, Thebe Investment Corporation, which was founded by ANC leaders in 1992. Ithuba, the holder of the licence, is also in the running, as is Umbulelo Consortium, led by Afrirent Holdings; and Giya Games.
Tau as the Minster of Trade, Industry and Competition, is required by the National Lotteries Act to award the national lottery and sport pools license.
“I am not in a position to make a final decision at this stage. Any such decision at this time would in all good conscience mean that I have not applied my mind with due consideration of all the relevant factors,” the Minister said in a statement.
Tau said he had identified matters that require further evaluation adding that it would be “inappropriate to disclose these issues now and their disclosure could very well prejudice the proper adjudication of the awarding of the license.”
The Minister said the protection of the integrity of the process is of paramount importance.
The running of a lottery is a complex undertaking upon which many vulnerable people and important organisations depend. Therefore, in taking my decision, I must choose an applicant which, I believe, will maximise the net proceeds of the National Lottery and sports pools,” he explained.
In addition, the Minister must act in terms of the provisions of the Constitution, which requires a process of adjudication that is fair, equitable, transparent, competitive and cost-effective.
“I am also enjoined to act in accordance with the National Lotteries Act, which requires me to be satisfied that the successful applicant has sufficient experience and know-how and the necessary financial and other resources.
The Minister must also ensure that the owners and managers of the successful applicants are, as the Act states, “fit and proper persons”.
“In addition, I must ensure that no political party or political office-bearer has any direct financial interest in the applicant or a shareholder of the applicant. And, I must choose an applicant that has demonstrated the necessary commitment to the social responsibility programme and to the advancement of those disadvantaged by unfair discrimination.
“For this reason, some of the criteria that are considered are the promotion of our local economy and broad-based black economic empowerment,” he said.
Tau said that he was aware that “the country and the applicants for the licence are anxiously awaiting my decision”.
“I am also mindful of the complexity and gravity of the issues that must be considered. Therefore, I have decided to postpone my decision pending the consideration of these matters.”