Parks Tau seeks to overturn court ruling on National Lottery licence

The Minister of Trade, Industry, and Competition, Parks Tau, has filed an application for leave to appeal a recent court ruling that set aside his decision to grant a 12-month temporary licence to Ithuba Holdings, the current operator of the National Lottery. 

The appeal, lodged with the Pretoria High Court, effectively allows Ithuba to continue running the lottery until the appeal outcome is reached.

In his notice for leave to appeal, Tau denied any intention to favor Ithuba Holdings, saying that the conditions of the 12-month lottery licence bid were "unavoidable and natural" in the specialised lottery industry. 

"While the Minister acknowledged that the incumbent licencee might possess an inherent operational advantage due to its established infrastructure in South Africa to conduct the National Lottery, this is a natural and unavoidable consequence of incumbency in such a specialised field," the court papers stated.

The court papers said that in the event of leave to appeal being granted, the Applicant would seek an order upholding the appeal with costs, including the cost of two counsel, setting aside the order of the court a quo and replacing it with an order dismissing the application with costs, including the costs consequent upon the employment of two counsel.

“The First Respondent (Wina Njalo) therefore seeks an order granting leave to appeal to the Full Court of this division, alternatively, the Supreme Court of Appeal, and an order that costs of this application shall be costs in the appeal.”

The Gauteng High Court had previously ruled that Ithuba's operating license could only be extended for five months, until the new operator, Sizekhaya Holdings takes over.

The NLC had argued that a 12-month temporary licence was necessary to ensure a smooth transition, but the court disagreed.

The court ruling, handed down by Judge Sulet Potterill, found that Tau's temporary licence bid was unconstitutional, unlawful, and invalid. 

Potterill also set aside Tau's decision to grant Ithuba a licence until May 31, 2026, and instead allowed for a five-month temporary licence. Ithuba had argued that this timeframe would not be financially viable for the company.

Tau announced that he had granted a 12-month temporary licence to Ithuba Holdings, allowing them to continue operating the National Lottery from June 1 until the end of May next year - when Sizekhaya Holdings took over as the operator.

The National Lottery is considered to be the biggest tender in the country with over R180 billion that was made in the last eight years.

In his appeal, Tau accused the court of judicial overreach into his executive functions, saying it did not accord him appropriate recognition that an early disclosure of the winning bidder would compromise the lottery licence adjudication processes.

"The Court erred in finding that the Minister's issuance of the temporary licence RFP (request for proposals)constituted reviewable administrative action," Tau's court papers read.

Tau further argued that the court failed to fully appreciate the complexities in the adjudication and awarding of the National Lottery licence. 

"The approved 12-month temporary license period was set to make it financially viable and appealing to potential applicants," Tau's papers stated. "A shorter period, like six months or less, would not be sensible due to the high costs and effort involved in starting and running the lottery."

The National Lottery's new operator, Sizekhaya Holdings, is expected to take over the lottery on June 1, 2026. However, the appeal process may delay the transition, and Tau's decision to grant Ithuba a temporary license has sparked controversy.

The National Lotteries Commission (NLC) has also lodged two appeals against recent court rulings. The NLC believes that Judge Potterill misdirected herself and erred in her ruling, which suggested that the minister and the NLC "predetermined the outcome of the tender process or framed the RFP to predetermine the outcome."

The appeal process will determine the fate of the National Lottery licence.

mashudu.sadike@inl.co.za