Pretoria - If the new national lottery licence awarded to BEE start-up company Ithuba was to be set aside, there would be a period of time during which there would be no lottery.
This would be detrimental to the public, especially charities who would lose out on a cut of the money.
This is according to Ithuba, which holds the national lottery licence. The company is opposing an application before the high court in Pretoria to set aside a decision by Trade and Industry Minister Rob Davies to award it the licence.
Ithuba will later this week deliver its full arguments before Judge Billy Mothle in opposing the hefty application, which is expected to last several days.
The minister, as well as the National Lotteries Commission, will also defend the decision to award the tender to Ithuba.
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Gidani had been fighting an ongoing legal battle to operate the national lottery again after Ithuba took over the licence in October 2014.
Gidani at the time also asked that the decision by the minister to award the licence to Ithuba be set aside.
In July last year, Judge Neil Tuchten granted the application and ruled that the licence agreement with Ithuba was invalid. He ordered the minister to reconsider the tender.
A month later, the minister reissued the operator’s licence to Ithuba.
Gidani is now back in court and again asking that this licence be declared invalid. Azhar Bham SC, acting for Gidani, argued at length the provisions of the Lotteries Act, which he said, among others, stipulated that the minister must be satisfied that the company to which the licence is awarded has the financial means to conduct the national lottery.
Another fundamental aspect is that the company holding the licence must maximise the net proceeds to the National Lottery Distribution Trust Fund (NLDTF), through which charities are funded, Bham said.
According to him, Ithuba fell short in these and a number of other aspects.
“Given the purpose of the national lottery, contributions paid by the operator to the NLDTF are fundamental.
“The minister’s experts advised him that Ithuba’s business plan would not generate sufficient revenue to yield higher contributions to the NLDTF than Gidani. Despite this, the minister persists in believing that Ithuba will maximise NLDTF contributions.”
Bham argued that the minister took a risk on Ithuba.
“It is a risk based on little more than a theoretical possibility of Ithuba’s business plan generating revenue to compensate for its lower contribution percentage.”
The minister, in asking that the application be turned down, said the court should not interfere in risk-taking by the executive.
But Bham said the court had a duty to interfere in this decision.