Incoming lottery operator Sizekhaya Holdings commits to giving IP to govt once licence expires
JOHANNESBURG - Incoming National Lottery operator Sizekhaya Holdings has committed to handing over its intellectual property (IP) to government once its licence expires.
This will allow the government to be able to run its Lotto operations in-house.
ALSO READ: Lotto operations to run normally after Ithuba Holdings licence temporarily extended
Sizekhaya was recently announced as the fourth National Lottery and Sports Pool licence holder, starting from 1 June 2026, taking over from Ithuba.
This is one of government's most expensive tenders, worth about R200 billion over eight years.
'We have promised to hand over the intellectual property of our lottery design, development and execution to the government for insource capacity to run the Lotto at the end of our tenure. This and many reasons are why we believe we won the right to operate the Lotto for the next eight years,' said the chairperson of Sizekhaya Holdings, Moses Tembe.
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Daily Maverick
8 hours ago
- Daily Maverick
Lottery jackpot — Mashatile's family tied to new multibillion-rand operator deal
Adding to previous concerns over possible political interference in the award of the fourth national lottery licence, it has emerged that Deputy President Paul Mashatile's sister-in-law has a stake in the game. Sizekhaya Holdings, which landed the lucrative licence to operate South Africa's national lottery for eight years, has links to Deputy President Paul Mashatile. Among Sizekhaya's shareholders is Bellamont Gaming, a company co-owned and co-directed by Khumo Bogatsu – Mashatile's sister-in-law – and Moses Tembe, the KwaZulu-Natal businessman who chairs Sizekhaya and seems close to Mashatile. Bogatsu is the twin sister of Humile Mashatile, Mashatile's wife. The deputy president and Humile were married in a lavish set of celebrations attended by the political and business elite in March 2023. Bellamont Gaming was registered nine months later, in December 2023, with Tembe and Bogatsu as its founding and still only directors. Bellamont and consortium partners then registered Sizekhaya just days before last year's February 3 deadline to contest the fourth national lottery licence. Minister of Trade, Industry and Competition, Parks Tau, finally announced the award to Sizekhaya on May 28 this year after protracted delays and what he called 'this arduous exercise' of evaluating eight applications. The National Lotteries Commission, which answers to Tau, helps adjudicate licence bids. The lottery licence is almost literally a licence to print money. The outgoing operator, Ithuba Holdings, reported a R7.28-billion turnover in 2024. Bogatsu and Tembe's joint involvement adds to widespread fears that the politics of patronage may have intruded on the award process. Tembe stays in a palatial residence on Bellamont Road above Umdloti Beach, north of Durban – a road that lent its name to Bellamont Gaming and about a dozen other companies in Tembe's corporate arsenal. People from the area, who asked not to be named, said that Mashatile and Humile had frequented Tembe's home, particularly last year when the deputy president's sizable motorcade made itself known. In February last year, they allegedly stayed over for around six days ahead of the ANC's election manifesto launch in Durban. A picture shows Tembe and Mashatile together at St Paul's Anglican Church where the party was honouring those who lost their lives in a bus crash returning from the manifesto launch at Moses Mabhida Stadium. The manifesto launch was on 24 February, three weeks after the Lotto bid deadline. Tembe has been seen at Mashatile's side in public, including in May this year as part of the business delegation that accompanied the deputy president to France for an investment conference. 'Nothing to do with the deputy president' In a terse response to amaBhungane's questions, Mashatile's spokesperson, Keith Khoza, denied the deputy president interfered. 'He has nothing to do with the licence award process as it does not fall within the ambit of his delegated functions nor did he participate in any way, shape or form. Similarly, the business relationship with any of the parties involved has nothing to do with the [deputy president] and his wife.' Khoza did not respond to detailed questions about Mashatile's relationship with Tembe and the new lotto operator, nor whether he was briefed – formally or informally – on the lottery bid. National Lottery Commission spokesperson Rudzani Tshigemane referred questions to Tau's department, which did not respond to amaBhungane's query. Sizekhaya Holdings, answering on its, Bogatsu and Tembe's behalf, said it rejected 'with the utmost seriousness, any suggestion that our successful bid for the national lottery licence was influenced by political proximity'. Bellamont-Sizekhaya web Among numerous other business interests, Tembe directs 14 companies bearing the Bellamont name and is active in a wide swathe of economic activity. He has served as secretary-general of the KwaZulu-Natal branch of the National African Federated Chamber of Commerce and Industry, president of the Durban Chamber of Commerce and Industry, and board member of the South African Chamber of Commerce UK and KwaZulu-Natal National Business Initiative. He also co-chaired the KwaZulu-Natal Growth Coalition with then-premier Sihle Zikalala. Bogatsu, for her part, has co-directed three companies with her sister – Mashatile's wife – though they have since been deregistered, according to company registration records. Neither the size of Bogatsu and Tembe's respective stakes in Bellamont Gaming nor Bellamont's in Sizekhaya has been made public. Sizekhaya confirmed Bogatsu held shares in Bellamont. It said Bellamont in turn was a 'minority shareholder' in Sizekhaya and 'a legally compliant gaming entity'. Publicly available information records the Goldrush Group as Sizekhaya's largest shareholder, with 50%, which will reduce to 40% when a stake is issued to a government entity in line with licensing conditions. Goldrush is in turn 59.4% owned by JSE-listed Goldrush Holdings, whose shareholders include Mauritian-based Astoria Investments and local investors Jan van Niekerk and Piet Viljoen. Another notable figure in Sizekhaya is ANC-linked businessman Sandile Zungu. He was nominated for the position of ANC KwaZulu-Natal chair in 2022 but decided not to contest after speaking to ANC leaders. Zungu, like Tembe, accompanied Mashatile to France in May this year. The delegate list records Tembe as representing his Bellamont Investments and Zungu his Zungu Investments. It was a visit that later drew media scrutiny over Mashatile's travel expenses and the company the deputy president kept. The delegation included a businessman under scrutiny by Johannesburg Water, an amaBhungane investigation has found. Sizekhaya said Tembe and Zungu attended the investment conference 'at the formal invitation of the South African Ambassador to France, Mr Nathi Mthethwa' and that they were 'present as part of a longstanding national effort to promote foreign investment'. Sizekhaya did not respond directly to a question about Mashatile's alleged stay at Tembe's house before the ANC manifesto launch, but said Tembe 'has hosted and interacted with trade unionists, religious figures and political leaders across the spectrum, including the ANC, IFP, DA, EFF, MK Party – and yes, Deputy President Paul Mashatile'. Regarding a picture that shows Tembe and Mashatile together at St Paul's Anglican Church in Durban where the party honoured party faithful killed in a bus crash after the launch, it said Tembe had been invited by the presiding minister, his cousin Reverend Thami Tembe. 'This was a private family engagement of spiritual significance, and it would be inaccurate to attribute any political motive to it.' 'Never concealed' Sizekhaya dismissed any suggestion that the company's successful bid was tainted by political connections. 'This is a defamatory inference that maligns not only Mr Tembe's business integrity but also undermines the credibility of the regulatory and adjudication systems of the Republic of South Africa.' Sizekhaya also said Tembe 'has never concealed his association' with the deputy president: 'Given Mr Mashatile's public role as the country's second citizen and the scrutiny which accompanies it, it would be entirely illogical – if not impossible – to obscure any such association.' The Lotteries Act provides that 'no political party in the Republic or political office-bearer [must have] any direct financial interest in the applicant or a shareholder of the applicant' for a lottery licence. Sizekhaya said it had fully complied with the Act: 'No arrangements exist that confer a direct or indirect financial benefit to any political entity.' Bogatsu, it said, 'is not a political office bearer and is fully entitled to pursue any legitimate commercial interest'. Controversy The awarding of the fourth lottery licence has garnered significant public attention, which has focused also on the apparent political ties of other bidders. Political parties Build One South Africa (Bosa) and the Economic Freedom Fighters (EFF) have been outspoken on the issue. Bosa submitted a Promotion of Access to Information Act application last October to access the identities of the people tasked with adjudicating the tender amid concerns of conflicts of interest. 'At R180-billion, the contract to operate the national lottery is the country's largest tender. Given the amount of money involved, the process followed requires a high duty of care to ensure no malfeasance or wrongdoing by any party involved,' Bosa deputy leader Nobuntu Hlazo-Webster said. The EFF last year raised red flags including over the involvement of Tembe and Zungu in Sizekhaya. 'The minister's refusal to answer direct questions … raises serious concerns about the legitimacy and lawfulness of the process,' spokesperson Sinawo Tambo said. The process of the award has not been without struggle, plagued by delays and court challenges. In December last year, Tau said he had identified 'matters that require further evaluation' and postponed his decision. He cited the need to ensure that the licensee's owners and managers were fit and proper persons. 'In addition, I must ensure that no political party or political office-bearer has any direct financial interest in the applicant or a shareholder of the applicant,' he said. DM
Daily Maverick
2 days ago
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Government plans national lottery: A shift toward state control amid concerns of corruption
Since its inception, a private company has been responsible for operating the lottery and selling tickets. That is set to change in 2034. The government plans to introduce a state-run national lottery instead of using a private operator, as has been the case since the Lotto was launched 25 years ago. Details of the intention to effectively nationalise the lottery were revealed in a Request for Proposals (RFP) for the latest operator licence, which has been awarded to the Sizekhaya Consortium. If a state lottery were to be implemented, it would only happen in 2034, when Sizekhaya's eight-year licence, which commences on 1 June 2026, expires. The concept of a state-run lottery was first introduced in a 2013 amendment to the Lotteries Act but was never implemented. National Lotteries Commission commissioner Jodi Scholtz told GroundUp that the provision for a state-run national lottery in the amendment 'was in part a response to the disruption experienced in 2007, when the country found itself without an active lottery operator for several months' due to litigation. 'This legislative provision was intended to ensure continuity of the lottery and protect public interest and revenue streams designated for good causes, should similar challenges arise in the future,' she said. The issue of a state-run lottery was hotly debated by the trade and industry portfolio committee during the previous, sixth Parliament. There were disagreements among MPs about the wisdom of nationalising the lottery, with some arguing that in light of the corruption at state entities this could lead to further misappropriation of funds. Those who were for nationalisation said it would reduce profiteering by the licence holder. One of the champions for nationalisation was former National Lotteries Commission (NLC) board member Dr Muthuhadini Madzivhandila, who argued for a state-run lottery when he unsuccessfully applied for the post of NLC chairperson. Madzivhandi, who subsequently died, corruptly benefited from lottery grants. Since the amendment, several policy and legal review processes had been conducted 'to explore the practical implementation of this provision,' said Scholtz. Yamkela Fanisi, the spokesperson of trade, industry and competition minister Parks Tau, failed to respond to questions about the prospect of a state-run lottery and the reasons for the possible change. Transition to state lottery In terms of the Request For Proposals, bidders for the fourth lottery licence were 'required to commit to positioning the state to transition from privately operated National Lottery and National Sports Pool operations to a state-owned and operated National Lottery'. Applicants were informed that they had to 'demonstrate their ability to capacitate the state to prepare for and ultimately become the operator of the National Lottery and the National Sports Pool at the expiry of the Licence Period'. They were also required to provide a plan for how they would 'support the state in developing the necessary infrastructure, skills, and capacity to operate the National Lottery and Sports Pool' — a key part of the Request For Proposals deals with the transfer of rights to technology to operate the lottery. Responding to questions, Sizekhaya sent an unsigned written reply: 'Genlot [its Chinese tech partner] has assigned intellectual property rights for its lottery software to its 51% locally owned subsidiary, Genlot SA.' In terms of its agreement, Genlot SA is authorised to transfer this intellectual property (IP) to 'the South African state if it decides to operate the lottery in the future', Sizekhaya responded, declining to disclose details of the terms and conditions of such a rights transfer. Opening the door to corruption and waste The prospect of a state-run lottery opening the door to corruption and inefficiencies in light of what happened at many parastatals and government entities, where billions of rand were lost, was raised by some critics. The DA's Mat Cuthbert, who played a key role in Parliament in helping expose the endemic corruption that overwhelmed the National Lotteries Commission under its previous leadership, said: 'At the time, the National Lotteries Commission only had access to approximately 34% of all revenue generated by the National Lottery, housed under the NLDTF (National Lottery Distribution Trust Fund.) One can only imagine how much more public funding would have been stolen had they had access to the approximately R7-billion generated in ticket sales revenue per annum.' Professor Alex van den Heever of the Wits School of Governance was also sceptical of a state-run lottery. The wide discretion granted to the minister of Trade, Industry and Competition to appoint the board, commissioner and distributing agencies 'has been a recipe for corruption as a single person appoints all the strategic decision-makers', he said. The move to a proposed 'state-led approach failed to address the corporate governance flaws of the original configuration', Van den Heever said. 'Ministerial discretion, the likely driver of structural corruption to date, is retained at the same levels as before. There is therefore a high likelihood of ministerial overreach, exacerbated by a general absence of independent supervision, institutional safeguards, added to the uncertain capabilities of state structures. 'It is my expectation that this approach is designed to facilitate state capture and corruption of various forms — improper appointments, corruption in procurement and the selection of distributing agencies. The new provisions specify that certain accountability structures need to be implemented, which are inadequate, with their design and implementation vulnerable to the wide discretion of the minister. This discretion enables the minister to circumvent any implemented formal structures. 'When power is concentrated, circumvention is relatively straightforward. In my assessment, the same levels of corruption as before are likely to persist into the future. Nothing is cured by this change.' DM
Eyewitness News
3 days ago
- Eyewitness News
Godongwana thinks political parties should be wholly funded from national fiscus
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