Pretoria - Incumbent national lottery operator Gidani chose the wrong numbers combination and has subsequently lost the jackpot to Ithuba Holdings.
Pretoria High Court Judge Neil Tuchten on Tuesday cleared the way for Ithuba to take over the operation of the Lotto from June next year.
He dismissed Gidani’s application to set aside a decision by Trade and Industry Minister Rob Davies to award the lottery licence to Ithuba, pending a review.
Judge Tuchten ruled Gidani had weak prospects of success on the merits of a review. Gidani’s current licence expires at the end of May next year.
Following a process which started in June last year, Gidani was recommended by the National Lotteries Board as the preferred bidder, with Ithuba the reserve applicant. However, Davies did not designate Gidani as the preferred application and reversed the order and selected Ithuba. He named Gidani the reserve bidder.
Mzansi Games and Grand Lottery had also submitted bids for the country’s third national lottery licence. The national lottery is run for five years with a possible extension bringing the total period to a maximum of eight years.
In the first stage, the evaluation committee rated Ithuba above Gidani.
The matter went to the adjudication committee, which also scored in favour of Ithuba on technical and financial evaluation. But by majority decision, the committee recommended Gidani based on the assessment of risk factors and realistic contributions to the National Lottery Distribution Trust Fund.
After consultations with departmental advisers, lawyers and economists, Davies selected Ithuba. It emerged in court that he was advised Ithuba fared better on business planning, while Gidani was higher on trust fund contributions and marketing. Both were equal on financial analysis.
Legal teams for both bidders argued Davies may not seek expert advice, but the judge dismissed this, saying it was not part of the founding affidavit by Gidani.
Gidani claimed in court papers that selecting Ithuba was irrational and arbitrary, and that relevant considerations were not properly taken into account.
But Judge Tuchten ruled the case was brought by Gidani before the operator learnt that Ithuba had been awarded the licence. He said the attack on the minister was on the selection of Ithuba as preferred applicant, but Gidani shifted ground to cater for the changed situation.
“Gidani relied on material put up by the minister to answer to the criticism about his decision to appoint Ithuba as preferred applicant to make a case that he acted unlawfully,” said Judge Tuchten. “I have strong reservations about the nature of the right which Gidani seeks to protect.”
He said that while no criticism could be directed at Gidani, it would be unfair for him to interdict the implementation of the minister’s decision on additional grounds to those advanced in the founding affidavit.
Judge Tuchten said Davies came to the conclusion that Ithuba’s business model would achieve the desired results. “On these facts, I cannot conclude that the minister’s impugned conduct was irrational. Maximising the returns for good causes is a legitimate government goal.”
Pretoria News