Court voids Sizekhaya lottery award, orders minister to decide again
High Court finds licensing process flawed and hands decision back to Parks Tau
The North Gauteng High Court has set aside the award of South Africa’s fourth lottery and sports pools licence to Sizekhaya Holdings RF (Pty) Ltd, finding the process flawed and ordering trade, industry and competition minister Parks Tau to reconsider his decision. The ruling also voids the licence agreement concluded between the minister, the National Lotteries Commission (NLC) and Sizekhaya, reopening the contest for one of the country’s most lucrative public licences.
In suspending the declaration of invalidity, the court gave the minister two consecutive six-month periods to resolve the matter without disrupting national lottery operations. The first window allows Tau to reconsider the licence award and make a fresh determination on who should operate the lottery. The second provides time to negotiate and conclude a new licence agreement and, if necessary, implement transitional arrangements should another bidder be selected.
Judge Norman Davis identified serious shortcomings in the process leading to the award. Among them was the involvement of a ministerial committee that effectively ran a “parallel process” to evaluate bids. The court also found there was “no indication” that Tau had properly considered the recommendations of the quality assurance committee before making his final decision. Any fresh decision, the court directed, must be made without relying on the ministerial committee’s report and recommendations.
The judgment followed review applications brought by Ithuba Lottery and the Ringeta Consortium, both of which challenged the legality and fairness of the licensing process. Last year, Ithuba approached the courts to halt Sizekhaya’s takeover, arguing the process was flawed, that proper due diligence had not been conducted, and that key requirements in the request for proposals had not been adequately considered.
For Sizekhaya, the ruling is a major setback. The company was announced in May as the preferred bidder to operate the national lottery and sports pools for the next eight years, a decision that immediately sparked legal challenges from unsuccessful bidders and intensified scrutiny of a selection process already plagued by delays and controversy.
Meanwhile, Ithuba welcomed the judgment, describing it as a validation of its long-held concerns about the integrity of the licensing process. “The judgment vindicates Ithuba’s stance that the appointment of the South African national lottery operator must be guided by the principles of fairness, transparency and accountability and must comply with the applicable legal and regulatory framework,” the company said, adding that the ruling reinforced the principle that appointing a lottery operator must be lawful and in strict compliance with applicable regulations. Ithuba confirmed it is reviewing the judgment with its legal team to determine its implications and consider its next steps.
Further background on the ruling can be found here: https://www.citizen.co.za/news/south-africa/courts/national-lottery-licence-thrown-uncertainty-after-court-scraps-sizekhaya-award/
The political scrutiny that shadowed the award last year has also resurfaced in the wake of the judgment. Deputy President Paul Mashatile previously denied suggestions of political interference in the awarding of the licence to Sizekhaya Holdings. Among the company’s shareholders is Bellamont Gaming, a company co-owned and co-directed by Khumo Bogatsu and Moses Tembe, the KwaZulu-Natal businessman who chairs Sizekhaya. Bogatsu is the twin sister of Humile Mashatile, the deputy president’s wife.
The judgment leaves the future of the fourth licence unresolved and places the decision squarely back in Tau’s hands. The minister now has 12 months to revisit a tender process dogged by legal disputes, delays, and allegations of irregularities before deciding who will ultimately run South Africa’s national lottery in the years ahead.
Q&A
Why did the North Gauteng High Court set aside the fourth lottery licence award?
Judge Norman Davis found the process flawed: a ministerial committee effectively ran a parallel process to evaluate bids, and there was no indication that Tau properly considered the quality assurance committee's recommendations before his final decision.
What did the court order the minister to do, and within what timeframe?
The court gave the minister two consecutive six-month periods: the first to reconsider the award and make a fresh determination, the second to negotiate and conclude a new licence agreement and, if necessary, implement transitional arrangements, without disrupting national lottery operations.
Who challenged the licensing process in court?
Ithuba Lottery and the Ringeta Consortium brought review applications challenging the legality and fairness of the process, with Ithuba arguing that proper due diligence had not been conducted and key request-for-proposals requirements were not adequately considered.
What political and shareholder links drew scrutiny around the award?
Deputy President Paul Mashatile previously denied suggestions of political interference. Sizekhaya shareholder Bellamont Gaming is co-owned by Khumo Bogatsu, twin sister of Humile Mashatile, the deputy president's wife, and co-directed by Moses Tembe, who chairs Sizekhaya.