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No 'tata ma chance' with lotto licence

Jun 18 2013 17:00
Rob Davies

Trade and Industry Minister Rob Davies. (Duncan Alfreds, News24)

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Cape Town - The National Lotteries Board (NLB) will ensure the awarding of a new National Lottery operating licence is above board, Trade and Industry Minister Rob Davies said on Tuesday.

Briefing journalists in Cape Town, Davies said this would be the "most scrutinised lottery bid yet".

"We want to make sure that we have an uninterrupted transition... so that means that we have to be very, very careful that at every step of the way we act very strictly according to the [Lotteries] Act, so that we are not vulnerable to all kinds of litigious process afterwards," he said.

The licence for Gidani, the current lotteries operator, expires on May 31 2015.

When the licence was first awarded to Gidani in 2007, a legal challenge was launched by previous operator Uthingo, with Judge Willie Seriti ruling the process of appointing a new operator flawed.

At the time, political office bearers had stakes in both Gidani and Uthingo.

One of the reasons for opening up the application process so early was to give the NLB and auditors sufficient time to scrutinise all proposals. Seriti's previous ruling had resulted in there being no lottery draws in the country for six months.

Scrutinise all proposals

This time around, Davies said auditors would make sure they scrutinised the directorships of bidding companies to ensure the same did not happen.

In June , Davies invited all interested parties to apply in writing for a Request for Proposal (RFP) document, setting out the criteria.

"The closing date for the submission of a RFP will be November this year. Then the intention is to sign the new operator licence on October 31 2014," Davies said.

Between November and October next year, the NLB will evaluate the bidding companies according to criteria in the RFP documents and make a recommendation to the minister.

"Then it's up to the minister at that time to engage with the recommendation of the lotteries board and then to make a decision. There's quite a long period of time between the decision and the operator coming on board and taking over," Davies said.

It would cost applicants R2.5m to apply for the licence.

"We have to employ auditors, we have to make sure that there's this virtual secure facility to communicate, that everything happens strictly according to the letter of the law and that costs us."

Companies wishing to participate in the tender process would therefore have to contribute to the costs.

Prospective licencees would, among other things, have to:

  • Ensure state equity (of 20%);
  • Ensure broad-based black economic empowerment; and
  • Demonstrate beyond any reasonable doubt that they are a private company, duly incorporated in the Republic of South Africa.

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