Gidani set for lotto high stakes

Gidani, the company that has won the licence to operate the national lottery, is feverishly preparing for its takeover on April 1, despite a legal challenge from Uthingo.

A spokesperson for Uthingo said this week a Pretoria High Court judge would decide whether the tender process had been handled fairly.

Gidani maintains it won the licence to operate the national lottery in a thorough, scrupulous and fair contest. Already thousands of pieces of equipment, including shop fittings and lottery terminals, have arrived and the company has started training 30 000 lottery operators.

The company was moving into its Midrand head office this week.

Gidani won the licence in October.

The licence allows the company to conduct all lotteries covered by the Lotteries Act for seven years from April 1, and provides for no interruption or significant changes to the current games. Gidani is a South African company with a "significant" black economic empowerment component and 20 percent government stake.

Sershan Naidoo, spokesman for the National Lotteries Board, said the board would be unaffected by the change. The existing games, such as the scratch cards, would also stay the same but Gidani had the right to add new games. He said Uthingo staff had been aware their jobs were dependent on Uthingo having a licence.

He said Gidani had also increased the share of takings that went into the lottery Distribution Trust Fund from 28 percent to 34 percent. This was the country's largest funder of non-governmental organisations. More than R4,7-billion has already been allocated to more than 9 000 NGOs.

In 2006 there was an uproar when more than R257-million meant for charities was still not distributed because the department of trade and industry had delayed the appointment of the distributing agencies.

Many charities in the Western Cape said they did not apply for funds because no call for proposals was put out.

In response, Naidoo said the new distributing agencies began adjudication in August. Between August and December 2006 about R280-million had been allocated to 450 beneficiary groups. In the arts sector for the same period, 109 allocations amounting to R220-million had been made.

The charities agency received about 4 000 applications each time it called for them, with about 1 500 applications each from the arts and sport. About R1,2-billion is allocated a year, but about R13-billion is sought.

"Many applicants believe that because there are funds available and because they apply they are entitled to get funds. This is not a given," said Naidoo. Lotto had been set up to assist NGOs, not run them.

"We see that organisations are doing less and less in the form of fund-raising. They are becoming too reliant on us for their existence and if the time frames do not fit in with theirs, there is a public outcry. The fund will not succumb to pressure at the expense of the integrity of the process."

Before the introduction of the lottery, many charities raised money through scratchcards and other games of chance, but these were outlawed in favour of the lottery.

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