South Africa will on Monday have a new national lottery operator in the form of Sizekhaya — which pipped incumbent Ithuba to pole position after a protracted bidding process that is headed for a legal showdown.Sizekhaya, backed by businessmen Sandile Zungu and Moses Tembe, will operate the national lottery on an eight-year contract should Ithuba not succeed in overturning the licence awarded last year by minister of trade, industry & competition Parks Tau.JSE-listed GoldRush holds a 40% stake in Sizekhaya.Ithuba CEO Charmaine Mabuza told Business Times that she is proud of the work and innovation the company has brought to the industry since assuming the reins of the lottery in 2015.“Ithuba’s legacy is one of disciplined growth, operational resilience and meaningful national contribution. Over more than a decade, we modernised and expanded access to the national lottery on an unprecedented scale while contributing significantly towards good causes,” she said.“Despite operating in a mature market, Ithuba achieved more than 46% sales growth, with over 64% of sales ultimately generated through digital platforms enabled by Ithuba. This included strategic partnerships with eight banks and the rollout of more than 175,000 handheld devices nationwide, reflecting the success of our innovation-led strategy and our understanding of evolving consumer behaviour. “Ithuba’s recognition by the World Lottery Association (WLA) for upholding global standards in security, responsible play and operational excellence is a testament to the collective contribution of our leadership and the efforts of our dedicated, highly skilled staff and stakeholders. Ithuba set a high benchmark for what a modern national lottery operator should deliver.”Mabuza, the first woman to own and lead a lottery operator, could not be drawn to discuss the merits of the legal challenge launched by the group to set aside the licence awarded to Sizekhaya, saying the courts will decide on the procurement process for the more than R80bn contract.The EFF has asked the court to be an intervening party, also calling for Sizekhaya’s contract to be set aside.The conclusion of the process saw Ithuba ranked second behind Sizekhaya. Tau, in his reasons for awarding the contract to Sizekhaya, said it was because it presented a “well-balanced bid”.“In my view, Sizekhaya pipped the others to the post. It presented a well-balanced bid … It has an impressive technology partner. Its financial plans and models are sound. Its projected revenue is suitably ambitious, yet credible,” Tau said in reasons provided to bidders.Tau also outlined the reasons why he selected Ithuba as a reserve bidder, saying that its inclusion of a local technology partner was a main drawcard.“Overall, it provided stronger localisation and supplier development strategies compared to the other bidders, and it also held a higher overall broad-based BEE rating. Ithuba Lottery submitted credible and pragmatic financial and business plans, with a high likelihood to grow contributions to the National Lottery Distribution Trust Fund.”The legal challenge launched by Ithuba is a high-stakes battle in which the winner takes all. Ithuba last year failed to convince the North Gauteng High Court to interdict Sizekhaya’s contract from coming into effect.The court found the matter was not urgent, setting the scene for a bruising main application to be heard later this year.The EFF will raise an issue over the participation of Deputy President Paul Mashatile’s sister-in-law in the Sizekhaya consortium.One of the grounds on which Ithuba is challenging the award of the fourth licence is that Sizekhaya lacked fully committed funding prior to the award — a key requirement of the tender process. Sizekhaya has denied this allegation. The EFF will raise an issue over the participation of Deputy President Paul Mashatile’s sister-in-law in the Sizekhaya consortium. Sizekhaya has denied that this link to Mashatile influenced the decision to award it the contract, saying it won on merit only.Sizekhaya has declared it is ready to hit the ground running in operating the lottery.Tembe, who serves as Sizekhaya’s chair, said the transition from Ithuba was not just an operational handover but also an opportunity to “renew and strengthen” one of South Africa’s most recognisable national institutions.“Innovation and accessibility will play a major role in Sizekhaya’s plans moving forward, including making participation easier and more convenient for players across retail and digital platforms,” Tembe said at Sizekhaya’s launch in Johannesburg last week.“The future of the national lottery must be accessible, modern and responsive to the way South Africans live today.”Business Times