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Minister Parks Tau’s decision, announced on Thursday, to postpone the awarding of the Lotto license for a further 12 months raises concerning questions of legality on what happens after 31st May 2025, when the current Lotto holder Ithuba’s licence expires, and 31st May 2026, the proposed new date when Tau commits to awarding the new licence.

The Lotteries Amendment Act states that a licence can only be extended for a non-renewable period not exceeding 24 months. The licence was extended already by former Minister Ebrahim Patel on 01 June 2023 to expire on 31 May 2025. As Tau cannot lawfully provide another extension, the two scenarios are possible:

Lotto ticket sales being suspended and grants frozen for a year, or

The National Lotteries Commission using its accumulated funds of R3,9 billion to pay out grants until the new operator is announced.

While Tau argues giving himself more time is required for additional evaluations on awarding a licence, this raises speculation around possible conflicts of interest of some of the bidders, all of which have close ties to the ANC.

The DA urges Minister Tau to set the record straight and proceed with a decision on the lottery licence without delay.

The Lotto licence is fiercely contested every time it comes up for renewal. Worth approximately R180 billion for each eight-year term, the matter has been contentious since 2022, resulting in Patel's extension. Whatever company wins the bid, a court challenge by one or more of the losers is virtually certain.

In view of the dependency of many NGOs and charities on the Lotto grants, it is unlikely the lotto will be cancelled for a year. This leaves the NLC paying out grants from its reserves as the likely scenario.

Minister Tau’s reluctance to choose a new licence holder raises more questions around the links the bidders have with various factions within the ANC and why it takes another year to evaluate bids that were already submitted months ago. There is speculation the front-runner is out of favour with the dominant ANC faction.

It is clear Minister Tau is navigating a treacherous political minefield and must put the interests of the Lotteries Commission first.

Issued by Toby Chance MP - DA Spokesperson on Trade, Industry & Competition