South Africa’s National Lottery is facing a potential nine-month halt in operations due to escalating legal disputes surrounding the selection of its new operator and the rejection of a proposed temporary license. This critical situation has emerged despite the government’s recent announcement of a successful bidder for the next eight-year contract, valued at a substantial R180 billion (approximately $10.0 billion / €8.9 billion / £7.5 billion).

On Wednesday, May 28, 2025, Trade and Industry Minister Parks Tau named Siyakhaya Holdings as the new operator for the National Lottery and Sports Pools contract. This announcement came just days before the current license, held by Ithuba Holdings, was set to expire on June 1, 2025. Eight companies reportedly competed for the significant eight-year contract. Litigation has already commenced over this fourth National Lottery and Sports Pools license award. Critics have also questioned Siyakhaya’s links to businessman Sandile Zungu, a prominent member of the governing African National Congress (ANC). Sizekhaya, a Gauteng-based entity, is led by a consortium that includes tycoon Moses Tembe and Zungu, and is notably part-owned by betting company Goldrush Holdings (50% owned by JSE-listed Goldrush), with Bellamont Gaming and Zungu holding additional shares. Sizekhaya also confirmed it will use Chinese supplier Genlot as its technology partner. The consortium, through Moses Tembe, has expressed confidence, stating, as reported by iGaming Times, that “South Africa has hit the jackpot with Sizekhaya,” highlighting its vast experience and collective vision to create “a more enhanced national lottery for good causes” that will grow the lottery and benefit more good causes. Tembe also noted, as reported by iGaming Times, that the choice of technical partner was deliberate to minimise foreign exchange leaving the country.

Uncertainty Over Immediate Lottery Operations

The immediate concern is the state of lottery operations from June 1, 2025, when Ithuba’s license expires. Minister Tau attempted to issue a one-year temporary license to ensure continuity of service. However, Wina Njalo, one of the unsuccessful bidders, challenged this in court. The Gauteng High Court subsequently ruled that the temporary license period could not exceed five months. Ithuba, considered by some as the only business capable of operating the South Africa National Lottery at such short notice, has reportedly stated that a license period restricted to just five months would be financially unfeasible.

The Department of Trade, Industry, and Competition (DTIC) and the National Lotteries Commission (NLC) planned to contest the High Court ruling in court today, Thursday, May 29, 2025, fearing a gap in operations until Siyakhaya can fully commence. NLC chairperson Barney Pityana warned in an affidavit, as reported by iGaming Times, that “If the court does not come to its assistance and extend the suspension period, there will be no lottery operations for at least nine months, from 1 June 2025.” He added, as reported by iGaming Times, that such a suspension could cost R1.8 billion in good cause funding. In the initial hearing, Judge Sulet Potterill ruled that the temporary licence favoured Ithuba and was therefore unconstitutional. Wina Njalo’s complaint had specifically cited the minister’s failure to explain delays, and the judge agreed, stating the minister had not fulfilled his constitutional duty to provide reasons, despite Tau’s assertion that he intended to announce the new provider by May 28.

Accusations of Cronyism and Minister’s Defense

The opposition to the decision has been vocal, with Ithuba, which has run the National Lottery since 2015, indicating it may take legal action following the decision. In a statement, Ithuba expressed, as reported by iGaming Times, that it is “expectably deeply disappointed by the recent decision” by the Minister of DTIC and the NLC. Ithuba stated its belief that this decision “undermines the principles of localisation and inclusive economic growth set out in the Request for Proposal,” arguing that its game portfolio is locally developed, its operational model prioritises economic inclusion, and its reach ensures accessibility for all South Africans from day one. Ithuba added, as reported by iGaming Times, that the decision disregards efforts to build a homegrown lottery ecosystem that supports small businesses, job creation, and channels maximum revenue to good causes.

The ANC’s political rivals have also sharply criticised the decision, alleging cronyism. The Economic Freedom Fighters (EFF) stated, as reported by iGaming Times, that “Instead of ensuring fairness, transparency and compliance with the Lotteries Act, [Minister Tau] has compromised a public asset, by awarding a contract worth over R180 billion over the next eight years to benefit the ANC’s cronies in a clear case of state capture.”

Trade and Industry Minister Tau responded to the widespread criticism in a statement announcing Siyakhaya as the successful bidder. Tau stated, as reported by iGaming Times, that “It is most unfortunate that this matter has already become the subject of litigation and a judgment of the High Court,” and that he is “seeking legal advice with a view to appealing against the judgment’s findings and orders, and I reserve all my rights concerning this judgment.” He clarified, as reported by iGaming Times, that “With due respect to the Honourable High Court, my announcement is the result of my undertaking made to the bidders and the Court before the hearing of the application.” Minister Tau also stated, as reported by iGaming Times, that he looks forward to the growth of the lottery and the sports pools under the stewardship of Sizekhaya, to a mutually beneficial and healthy working relationship between the DTIC, the NLC, and Sizekhaya, and to increased contributions to the many needy beneficiaries of the National Lottery Distribution Trust Fund.

Outlook for South Africa’s National Lottery

In conclusion, the South Africa National Lottery faces a critical juncture, with a potential nine-month shutdown looming due to a contested new operator award and a rejected temporary license. The situation highlights deep divisions and accusations of cronyism from political rivals, while the government attempts to navigate the legal challenges to ensure the continuity of lottery operations and the flow of good cause funding. The resolution of these legal and political disputes will be crucial for the future of the National Lottery and its ability to contribute to public good causes.