Consortium Victorious in Lottery Agreement, Yet Commencement Date Still Indeterminate
South Africa's National Lottery to transition to new operator following court ruling, temporary extension granted
The Trade, Industry and Competition Minister Parks Tau has announced that Sizekhaya Holdings, a consortium partly owned by the gambling company Goldrush, will take over South Africa's national lottery operation from current operator Ithuba Holdings. The latter's license is due to expire on 31 May, and a temporary extension has been granted to enable a smooth transition.
The temporary license, awarded to Ithuba Lottery - a sister company of Ithuba Holdings, will commence on 1 June. The official handover to Sizekhaya Holdings is expected to take place over an eight-year period; however, the precise commencement date of Sizekhaya's license remains uncertain.
The National Lotteries Commission (NLC) has initiated an urgent legal application to extend the duration of the temporary license beyond the initial five-month limit set by a High Court order in Johannesburg. The NLC has emphasized that preventing the temporary license from being extended would result in a cessation of lottery sales from 1 June, making it financially unfeasible for Ithuba Lottery.
Given that Sizekhaya requires at least nine months to prepare for full operations, the timing of the transition is critical. The legal proceedings to extend the temporary license are ongoing, with the NLC seeking to modify the court order to allow the temporary license to remain valid for a full year.
The current licensing process has been subject to extensive litigation, initiated by one of the bidders, Wina Njalo. Wina Njalo argued that Minister Tau favored Ithuba by delaying the announcement and opting to issue a temporary license, claiming that only Ithuba had the infrastructure in place to qualify for the temporary license.
Ithuba Holdings' license has previously been extended for two years, making it ineligible under the Lotteries Act for another license. However, a separate entity, Ithuba Lottery, which shares directors with Ithuba Holdings, participated in the bid.
Sizekhaya's technological partner is Genlot, a Chinese-based company operating the second-largest lottery in the world. Genlot manages lotteries across various countries, including Nigeria, Ghana, Kenya, Brazil, and Jamaica, with an annual turnover of around $60 billion.
The consortium's leadership includes KwaZulu-Natal businessmen Moses Tembe and Sandile Zungu, the latter of whom owns the AmaZulu Football Club. Zungu previously contested for the ANC KwaZulu-Natal chair position in 2022 before withdrawing.
Negotiations and legal proceedings continue, with further developments expected regarding the definitive start date for Sizekhaya's lottery operations.
- In the transition period, it seems likely that sports enthusiasts might find temporary lotteries at casino-and-gambling establishments, as the temporary Ithuba Lottery, a sister company of the current operator Ithuba Holdings, will operate during this stage before Sizekhaya Holdings takes over the national lottery.
- The new lottery operator, Sizekhya Holdings, has a strategic partnership with Genlot, a global lottery management company with operations in various sports-loving countries, indicating that sports-themed lotteries could potentially be introduced under Sizekhya's tenure, given the company's involvement with the AmaZulu Football Club.
