Court Battle Looms Over Lottery Licence

A losing bidder for the fourth lottery licence has filed an application in the Pretoria High Court probing the award of the licence last month to Sizekhaya Holdings.

• Lekalinga, a Serbian-based company that teamed up with local partners to bid for the fourth lottery licence, has taken Minister of Trade, Industry and Competition Parks Tau to court.
• The company seeks to set aside the minister’s decision to award the fourth lottery licence to Sizekhaya Holdings.
• Lekalinga wants the minister to produce the reasons for his decision in 15 days.
• The company wants to know if the minister assessed whether any political party or political office-bearers hold a direct or indirect financial interest in Sizekhaya.

A losing bidder for the fourth lottery licence has filed an application in the Pretoria High Court, seeking to review and set aside the decision last month to award the licence to Sizekhaya Holdings. But first, the bidder wants Minister of Trade, Industry and Competition Parks Tau to produce the record of his decision when making the award.

The run-up to the award of the licence by Tau has been marred by controversy and legal action. Tau delayed making the announcement for eight months. He then used his special powers to grant an emergency licence, to run for a year, which was given to Ithuba Lottery, a sister company of Ithuba Holdings, which held the third licence for eight years.

The minister has never given reasons for the delay, citing only unspecified “concerns”, in spite of court action by another bidder, Wina Njalo.

Lekalinga (RF) Pty Ltd, a Serbian-based company that teamed up with local partners to bid for the licence, wants the minister to produce the record of the award decision. The company is questioning whether Sizekhaya could lawfully be awarded the licence, contending that it did not comply with some of the conditions bidders had to adhere to.

In his affidavit, Lekalinga founder Vladimir Vukovic said to the best of his knowledge there were eight bidders for the fourth lottery licence.

He said the minister was scheduled to announce the winner in September 2024 but extended the bid validity process to the end of May 2025. He then made the announcement on 28 May.

Vukovic said his attorneys had immediately written to Tau, requesting reasons for the decision, according to the provisions of the Promotion of Administrative Justice Act, given the “profound public importance and interest, and to ensure public confidence”. The minister had not responded.

“As a result, Lekalinga does not know the basis on which the licence was awarded to Sizekhaya or why the other bids were unsuccessful,” Vukovic said. Lekalinga’s court application seeks to force the minister to provide these reasons.

He said information in the public domain raised concerns that the decision may have been “tainted by irregularities”. The Lotteries Act, read in conjunction with the Request for Proposals (RFP), imposed a strict prohibition on political involvement in the lottery, he said. This served a “critical purpose” to ensure independence and safeguard the integrity of the National Lotteries Commission and the lottery.

In December 2024, the minister, in a media statement regarding the delay in awarding the licence, said he needed to ensure that “no political party or political office-bearer has any direct financial interest” in the applicants or a shareholder of the applicant.

Vukovic said that this suggested that he was only assessing “direct financial interest”, when the RFP expressly requires the consideration of direct and indirect financial interest.

Since Sizekhaya Holdings has links to JSE-listed gaming group Goldrush, the minister would have been required to ensure that none of its shareholders were “prohibited persons”.

Vukovic said there had already been allegations regarding Sizekhaya’s political connections.

“While we are not in a position to verify the accuracy of these allegations at this stage, the record must be produced to ventilate these issues.

“The record should reveal the extent to which the minister assessed whether any political party or political office-bearer holds a direct or indirect financial interest in Sizekhaya and ensured compliance with the applicable prohibitions,” he said.

He said if there had not been compliance, it would render the minister’s decision unlawful.

Another matter of concern, Vukovic said, was Sizekhaya’s inability to take over the lottery within five months, as stipulated in the RFP.

“This timeline is significant. It points to the ability to mobilise resources, infrastructure and operational capacity within that time frame. It is a key indicator of whether a bidder possesses the requisite knowledge and experience,” he said.

Sizekhaya cannot take over within that time-frame, and “more troubling” was that Tau and the NLC were aware of this before the licence was awarded, he said.

This was evident from affidavits they had filed in the Wina Njalo applications, and the subsequent award of the 12-month temporary licence to Ithuba Lottery.

Vukovic said that if, when the record was produced, review grounds were established, Lekalinga would seek the order to review and set aside the award of the licence to Sizekhaya.

The minister has 15 days to produce the record.

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