Trade, Industry and Competition Minister Parks Tau will on Wednesday announce a new company to operate the National Lottery, after the Gauteng High Court, Johannesburg, rejected his attempt to extend Ithuba Holding’s contract to May 31 next year under a temporary licence.
Tau wanted to extend Ithuba’s contract despite that it was due to expire on May 31.
Delivering judgment on the case brought before him by one of the bidders, Wina Njalo Proprietary Limited, Judge Sulet Potterill said on May 21 that Tau was acting unconstitutionally and unlawfully in delaying choosing a new company to succeed Ithuba in the operation of the National Lottery.
Ithuba’s contract started in June 2015.
“The minister is ordered to determine a successful applicant for the fourth National Lottery Licence by no later than 28 May 2025.
“The minister must negotiate a licence agreement by no later than 28 May 2025,” read the court order.
Trade, Industry and Competition spokesperson Bongani Lukhele said eight companies were shortlisted for the contract, but declined to name them, saying the list “has not been officially released”.
However, Judge Potterill suspended his order for five months to give a successful bidder enough time to prepare for the takeover.
This would require acquiring equipment and substantial infrastructure totalling hundreds of millions of rand.
The winner would have to look for funding from businesses.
The judge also ordered Tau, the National Lotteries Commission (NLC), and Ithuba Lottery to pay legal costs for Wina Njalo’s three counsels.
The judge established that a newcomer would have to establish the infrastructure, including manufacturing and transporting terminals across the country.
Wina Njalo approached the court after learning that Tau intended to extend the contract for 12 months, despite that the bid evaluation, adjudication committee, and independent audit concluded their work of selecting the front runners on August 31 of last year.
Initially, Tau was supposed to announce the successful bidder on September 2, sign the contract with the winner on December 13, and Ithuba hand over on June 1 this year.
However, this did not happen, and Tau only informed the NLC on December 20 that he was not ready to make up his mind about who the winner was.
He also sought advice on the means to ensure that the National Lottery continues to operate on a temporary licence.
“On 21 December 2024, the minister issued a media statement, which stated that he was aware that the country and the applicants were anxiously awaiting his decision, but he was mindful of the complexity and gravity of the issues that must be considered,” Potterill said.
In the statement, Tau expressed concern that his rushed decision might have regrettable consequences and continued to wait for the advice from the board, which only came on February 10, saying the period between January and June 2025 was not sufficient for proper selection and other processes that would follow.
It then recommended that the appointment be done on May 31, 2026, the advice that Tau conveyed to the bidders.
“On 24 February 2025, Wina Njalo indicated to the minister that for it to make an informed decision, it required clarity on the minister’s reasons for the proposed extension,” the judge said.
The minister responded in March, saying it would be “inappropriate to disclose these issues now as disclosure would prejudice the proper adjudication of the bids”, but immediately published the temporary licence.
This led to Wina Njalo raising a concern that the temporary licence was going to favour Ithuba.
Then Tau backed down and released the reason for seeking the extension, which was that he had not made up his mind.
“On 30 March 2025, Wina Njalo wrote to the minister proposing a consent order to formalise the minister’s new target date to avoid an urgent hearing.
“On 1 April 2025, the minister responded to Wina Njalo stating that he could not provide an unequivocal undertaking,” the judge said.
That led to Wina Njalo launching the urgent application on March 24, stating that the extension should be reversed as the temporary licence would lead to the National Lottery having no proper operator and might lead to it ceasing to operate, which would affect beneficiaries of the lottery, including charity organisations.
The judge concurred with Wina Njalo that the temporary licence was not a viable option.
