Sizekhaya Commences South African National Lottery Operations Amidst Legal Challenges and Political Scrutiny

Sizekhaya Holdings has officially begun its tenure as the operator of the South African National Lottery, taking over the prominent role on June 1, 2026. This eight-year contract, valued at an estimated R180 billion ($10.9 billion) based on projected ticket sales, marks a significant commercial shift for the country. The transition concludes Ithuba Holdings' 11-year operational period and introduces a new era for one of the world's larger national lotteries, albeit under the shadow of ongoing High Court litigation.

Contract Details and Operational Changes

The change of guard brought immediate operational enhancements, including the reintroduction of R130 million jackpots and live televised draws on e.tv. More than 5,500 new retail terminals have been activated nationwide to support the lottery's reach. Under the terms of the new license, 34% of the generated revenue is earmarked for the National Lottery Distribution Trust Fund (NLDTF), which channels funds to various charitable causes, sports, arts, and community infrastructure projects. Since its inception in 2000, the lottery has contributed over R31 billion to good causes, with Ithuba alone dedicating R1.83 billion to the NLDTF in the 2024 financial year from R7.28 billion in ticket sales.

Sizekhaya's Consortium Structure and Controversial Links

The Sizekhaya consortium is spearheaded by KwaZulu-Natal businessman Moses Tembe, who serves as the company's chairman, alongside AmaZulu FC owner Sandile Zungu. Its ownership structure includes Goldrush Holdings with a 40% stake, the state-backed National Empowerment Fund holding 20%, and Bellamont Gaming, a company linked to Tembe, controlling approximately 5.6% through a vehicle co-directed by Khumo Bogatsu. Bogatsu is the twin sister of Deputy President Paul Mashatile’s wife. The lottery platform for Sizekhaya is provided by Genlot, a Shenzhen-based firm also responsible for China’s national lottery technology.

This intricate ownership structure quickly drew the attention of opposition parties and investigative journalists, particularly concerning Bellamont Gaming's connection to Deputy President Mashatile's family. Reports by amaBhungane, an independent news organization, highlighted that Bellamont Gaming was registered in December 2023, and Sizekhaya itself was incorporated mere days before the bid deadline of February 3, 2024. Both the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) issued strong criticisms, with the EFF citing "irregularities, conflicts of interest and political exposure" and the DA calling for an independent investigation into what they termed a "manufactured outcome" to benefit Mashatile's relatives.

Sizekhaya and Partners' Defense

Sizekhaya and its partners have vehemently denied these allegations, asserting that their selection was based purely on merit following an open and competitive process. They maintain that claims of political influence are baseless. Deputy President Mashatile has publicly stated he played no role in the adjudication or the National Lotteries Commission's work, and neither Bellamont Gaming nor Sizekhaya ever discussed the bid with him. Goldrush acknowledged Khumo Bogatsu's familial ties to the Deputy President and her directorship in Bellamont Gaming, also admitting that some evaluation committee members had prior professional dealings with Goldrush and Bellamont, but affirmed these did not lead to improper influence. Tembe stated their victory was due to the bid's strength, gaming experience, and commitment to increasing state contributions. He added, "But we decry the baseless accusations, malicious rumour-mongering, mudslinging and personal attacks on shareholders and directors that have grown in volume since we were announced as the winners."

Tender Process and Minister Tau's Role

The tender process itself faced delays and legal challenges. Minister of Trade, Industry and Competition Parks Tau postponed naming a winner for eight months after eight bids were received. During this period, he issued a one-year "emergency" license to Ithuba Lottery to prevent a service disruption. In May 2025, the Pretoria High Court intervened, ordering Tau to finalize the selection by May 28 and declaring his earlier extension of the bid validity period unlawful. Tau announced Sizekhaya as the winner on the mandated date but initially withheld scores or detailed reasoning.

Legal Challenges and Dismissed Interdict

This lack of transparency led Lekalinga, a Serbian-backed consortium, and Ithuba to invoke the Promotion of Administrative Justice Act (PAJA), demanding full records and scores. Under legal pressure, Tau eventually submitted the Rule 53 record on August 5, 2025. In his reasoning, he praised Sizekhaya’s "well-balanced" bid, its impressive technology partner, robust financial models, and "suitably ambitious, yet credible" revenue projections, concluding that their proposed contributions to good causes would be the highest. Ithuba, not accepting this outcome, filed a review application in July 2025, and its sister company sought an urgent interdict in September to prevent the handover, citing alleged procedural flaws in Tau's decision-making. However, in November 2025, Judge Ronel Tolmay of the Pretoria High Court dismissed the interdict, asserting that Ithuba had not demonstrated a clear right to the relief and emphasizing that "It is in the public interest that the lottery should continue uninterrupted."

Pending Legal Battles

While Judge Tolmay’s ruling permitted the handover of operations, it did not resolve the broader legal dispute. Both Ithuba’s primary review case and Lekalinga’s parallel challenge are still pending before the North Gauteng High Court in Pretoria, with hearings scheduled for later this year. The EFF has also sought to join these proceedings, arguing that the alleged links to Deputy President Mashatile's family provide further grounds to overturn the contract. These reviews will scrutinize claims of procedural irregularities, including unlawful scoring, premature negotiations, and insufficient checks on political affiliations, as well as questions regarding Sizekhaya's readiness and funding at the time of the award.

Political Ramifications

The controversy surrounding the lottery license carries significant political ramifications, particularly for Deputy President Paul Mashatile, who is often viewed as a potential successor to President Cyril Ramaphosa. The unresolved questions and alleged family connections offer opposition parties a potent line of attack. In a May 2026 parliamentary session, Mashatile defended his relationships with businessmen linked to the bid, stating his friends are credible and their success is independent of his influence, emphasizing, "My friends have not stolen anything." He also pledged against interfering in government procurement and cautioned against presuming that successful black businesses are inherently tied to corruption. As the court reviews proceed, the lottery tender remains a crucial test for the government's procurement transparency and public trust.