Lottery in question: iThuba challenges licence issued to politically connected company

The current lottery operator has filed a lawsuit seeking to review and quash the decision to issue a fourth national lottery licence

This is the second lawsuit filed against Minister Parks Tau’s decision to issue a fourth lottery licence to Sizekhaya Holdings. 

Tau said Ithuba’s temporary licence was issued to ensure the smooth running of the lotteries and continued funding for charitable initiatives during the transition period. However, Ithuba Lottery said Sizekhaya Holdings had failed to meet the necessary requirements for immediate funding and a smooth transition, as evidenced by the Minister’s requirement to grant a temporary licence for a period of 12 months. Ithuba also raised concerns that Sizekhaya Holdings allegedly has political links between Sizekhaya shareholders Moses Tembe, Sandile Zungu and the African National Congress, including Deputy President Paul Mashatile.

The first complaint against Minister Parkes Tau was filed on 12 June by Serbian company Lekalinga, followed by Ithuba on 8 July. Both companies sought to obtain the Minister’s reasons for the decision and will therefore complete their submissions before the Minister can file a response affidavit.

The two complaints raise similar issues, including doubts about Sizekhaya’s financial viability and operational readiness to operate the national lottery, and whether the Minister properly assessed whether political parties or officials had a direct or indirect financial interest in the licensing process. Interestingly, there was an eight-month delay in announcing the winner, and it was the Minister’s decision to issue a temporary licence because of this delay that sparked controversy and litigation.

However, the Minister has never officially explained the reasons for the delay, only citing unspecified “circumstances”.

Ithuba noted that it had invested significant resources in developing Africa’s first centralised lottery system built on a local technology base. The organisation also claimed to have the necessary operational infrastructure, financial strength and technical solutions to ensure stable and reliable operations.

“This decision ignores the progress made in creating a truly homegrown lottery ecosystem that empowers small businesses, creates local jobs and maximises revenue for good causes,” said a spokesperson for Ithuba.

The company is particularly concerned about the potential risks associated with a decline in public trust, especially in the context of the distribution of charitable funds from the National Lottery Commission, which are intended to support socially vulnerable groups. In this regard, it becomes clear that Ithuba's actions are not aimed at avoiding public assessment, but represent an effort to initiate an open dialogue based on objective data. The company emphasizes that the lottery's activities make a significant contribution to the development of society through the funding of charitable projects, sports, infrastructure and cultural programs.