Pretoria - A lengthy contract with company’s awarded operating licences might be a solution to the woes the Department of Trade and Industry (DTI) experiences with the change in operators for the national lottery.
These were the sentiments of DTI Deputy Minister Mzwandile Masina over the latest high court ruling that the department’s awarding of the lottery licence to Ithuba Holdings was invalid.
The review application against Ithuba was filed by Gidani on November 7 after it lost the bidding. It ceased its operations on June 1.
Pretoria High Court Judge Neil Tuchten ruled that Minister Rob Davies acted unlawfully in awarding Ithuba the third lottery licence.
He, however, gave Ithuba and the department a month to sort out the licence irregularities.
Masina said Judge Tuchten’s ruling only cited two irregularities; that the minister was not allowed to defer Ithuba’s obligation to put up a R125 million performance bond to a later date than the date of the licence agreement, and, secondly, that the minister failed to consider the consequences of imposing a minimum fixed-rand undertaking on Ithuba and whether this obligation could undermine the group’s financial stability.
“On those two reasons alone the licence agreement with Ithuba was declared unlawful, but the court also upheld the minister’s decision to renegotiate the licence agreement,” he said.
Masina said it was on this basis that the minister and board would heed the 31 days given to them to renegotiate the terms of the licence to bring it line with the court ruling.
“At some point we have to take a radical decision about how and when we issue licences and consider issuing them once-off because we are spending a lot of money on legal fees instead of taking this money to good causes.
“We have to go and fight for decisions we make because this licence is of the department and we have the right to issue it for someone to run it and maximise its contribution to good causes,” he said.
Masina said one should look at the legislation issues over time and decide whether the time had come for South Africa to consider taking the international lottery licences route of issuing once-off terms for between 15 and 20 years.
“Gidani went through the same struggle when it took over from Uthingo. That’s why we are not in a position to blame them.
“So if they want to go to court to challenge this, they are more than welcome to do so.
“But we do hope we will not arrive at a point of having to stop the operation of the lottery and urge all parties involved to be considerate,” said the deputy minister.
In the meantime, lottery players were encouraged to keep playing regardless of the tensions.
Pretoria News