South African Court Forces Minister to Name New Lottery Operator by May 28

Legal Pressure Forces Decision

The challenge was brought by Wina Njalo, one of the companies vying for the eight-year lottery licence. The current operator, Ithuba Holdings, is set to see its tenure expire on 31 May. In response to delays, Minister Tau had proposed a stopgap solution: a one-year temporary licence, which critics argued would inevitably go to an entity closely tied to Ithuba.

Wina Njalo successfully argued that the plan unfairly favoured the incumbent, particularly because only Ithuba had the necessary infrastructure in place to run the lottery without disruption. “A tender process cannot have an inevitable outcome or be foreseeable,” said Judge Sulet Potterill. “This is crucial for ensuring fairness, transparency and adherence to procurement laws.”

Minister’s Reasoning Deemed Inadequate

In court filings, Minister Tau described the licensing process as “extremely complex,” pointing to past corruption scandals involving the National Lotteries Commission as justification for a cautious approach. However, Judge Potterill found his explanation insufficient and constitutionally flawed.

“He simply has not [provided reasons],” she wrote, criticizing the minister’s failure to explain the delay beyond vague references to unspecified concerns. The court declared the delay invalid and instructed Tau to announce the new operator by 28 May, unless he appeals the ruling.

Temporary Licence Under Scrutiny

The court also reviewed the temporary licence arrangement, which Tau had planned to offer while the main licence decision was pending. Documents revealed that Ithuba Lottery—an entity with seven shared directors with Ithuba Holdings—intended to assume operations by acquiring Ithuba’s assets and technology.

Though the judge acknowledged that an interruption to the national lottery could jeopardize funding for charitable causes, she emphasized that this did not justify bypassing due process.

She ruled that the proposed temporary licence was invalid but suspended the ruling for five months to ensure continuity of operations. “I am unconvinced that a period of 12 months is necessary,” she added, effectively limiting the extension.

Financial and Political Fallout

The ruling comes with cost implications: the minister, the National Lotteries Commission, and Ithuba Lottery have all been ordered to pay Wina Njalo’s legal fees. It’s a development that not only resets the National Lottery’s timeline but also underscores the importance of transparent procurement in state-controlled industries.

For now, all eyes turn to 28 May—the court-imposed deadline by which South Africa’s next lottery operator must be officially named.