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The National Lotteries Commission (NLC) has moved to reassure players, beneficiaries and other stakeholders that the National Lottery will continue smoothly despite Wednesday’s decision by the Pretoria High Court to set aside the licence to operate the National Lottery awarded to Ithuba Holdings (Pty) Ltd by the Minister of Trade and Industry.

In anticipation of the expiry of the licence of the previous operator of the National Lottery (Gidani (Pty) Ltd. on 31 May 2015, the Minister engaged in a competitive bidding process to appoint the new operator with effect from 1 June 2015. Gidani, Ithuba and two other entities participated in that process, at the conclusion of which the Minister identified Ithuba as the Preferred Applicant with whom he would first negotiate the licence, and Gidani as Reserve Applicant in case negotiations with Ithuba failed. The negotiations with Ithuba were successful, and in November 2014 the Minister issued the licence to operate the National Lottery to Ithuba with effect from 1 June 2015.

Gidani challenged the Minister’s two decisions: firstly to identify Ithuba as the Preferred Applicant and, secondly, to award the licence to Ithuba, in court on the basis that they were irregular and irrational. In today’s judgment, Judge Neil Tuchten upheld the Minister’s first decision, concluding that the Minister properly took the decision to identify Ithuba as the Preferred Applicant. However, Judge Tuchten identified three issues in the financial structuring of the licence agreement between Ithuba and the Minister that he concluded render the licence agreement non-compliant with the Lotteries Act. As a result, he set the licence aside and remitted the matter back to the Minister to reconsider his decision to issue the licence in view of those three issues.

Cognisant that it was undesirable to make an order that would result in the interruption of the National Lottery while the Minister is reconsidering the matter, Judge Tuchten quite properly suspended his order for 31 days to allow the Minister to remedy the defects in the licence agreement and reissue the licence should he so wish.

The NLC is confident that the Minister will apply his mind to the options open to him within the period granted by the court, mindful of the need for the continuation of the National Lottery, in order that the NLC may continue to discharge the invaluable mandate entrusted to it by legislation – that of ensuring that the proceeds of the National Lottery are used for good causes. In the meantime, the operation of the National Lottery continues unaffected by the court ruling.

Issued by National Lotteries Commission