A losing bidder for South Africa’s fourth lottery licence, Serbian-based company Lekalinga (RF) Pty Ltd, has filed an application in the Pretoria High Court challenging the recent awarding of the licence to Sizekhaya Holdings.
Legal Challenge Against Minister Parks Tau
Lekalinga, which partnered with local stakeholders to submit a bid, has taken Minister of Trade, Industry, and Competition Parks Tau to court. The company is demanding:
- That the minister produce the official record explaining why Sizekhaya Holdings was awarded the licence.
- Clarification on whether the minister investigated if any political party or office-bearer holds a direct or indirect financial interest in Sizekhaya.
Concerns Over the Licence Award Process
The process of awarding the fourth lottery licence was controversial and marked by legal disputes:
- Tau delayed the announcement for eight months, citing unspecified “concerns.”
- Instead, he granted a one-year emergency licence to Ithuba Lottery, a sister company of Ithuba Holdings, which previously held the third licence for eight years.
- Another bidder, Wina Njalo, had also legally challenged the delays.
Lekalinga’s Concerns & Court Application
Lekalinga’s founder, Vladimir Vukovic, stated that:
- Eight companies submitted bids for the fourth lottery licence.
- The minister initially planned to announce the winner in September 2024, but he extended the bid validity to May 2025.
- The final announcement was made on 28 May 2025.
Immediately after the announcement, Lekalinga’s attorneys requested a formal explanation under the Promotion of Administrative Justice Act, citing public interest and transparency. However, the minister has not responded.
Allegations of Irregularities
Lekalinga argues that Sizekhaya Holdings may not have met all bidder requirements, raising doubts about the legality of the licence award. Vukovic referenced key concerns:
- The Lotteries Act and Request for Proposals (RFP) strictly prohibit political involvement in the lottery sector.
- The minister had previously stated he must ensure that no political party or office-bearer has financial interests in applicants.
- However, Lekalinga claims that the minister only assessed direct financial interests, instead of both direct and indirect interests—as required by the RFP.
Concerns Over Compliance & Viability
Lekalinga is also questioning whether Sizekhaya Holdings can mobilize resources and infrastructure within the required five-month takeover period, as outlined in the RFP.
- If Sizekhaya is unable to do so, this would indicate that it lacks the necessary experience to operate the national lottery.
- According to court documents, Tau and the National Lotteries Commission were aware that Sizekhaya could not meet this timeframe before awarding the licence.
Potential Review & Legal Consequences
If the minister fails to justify the award decision, Lekalinga plans to request a court order to review and set aside the licence given to Sizekhaya Holdings.
The minister has 15 days to submit his formal response before further legal action proceeds.
