Blow for lottery operator’s bid to change software provider

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National lottery operator Ithuba has suffered a blow in its bid to change its software provider without the approval of regulator the National Lotteries Commission (NLC).

ITWeb recently reported that NLC, in October, launched an urgent interdict application at the courts to halt Ithuba from replacing IGT, a global company that has provided software services to the lottery provider since 2015.

In a statement today, the NLC says it “welcomes and endorses the decision taken by the Gauteng High Court on Friday, 3 December 2021, to interdict and restrain the national lottery operator Ithuba from changing their technology partner and gaming platform for the South African national lottery without the authorisation of the National Lotteries Commission, which is the regulator of lotteries and sports pools in South Africa, and that of the minister of trade, industry and competition”.

All was set for Ithuba to migrate its software platform to local software service provider Paytronix.

ITWeb understands a R250 million deal with Paytronix had been concluded before the court interdict by the NLC was launched at the 11th hour.

It was the NLC’s argument that by appointing Paytronix as the service provider, Ithuba acted illegally and breached the Lottery Technology Supply and Support agreement.

In the court papers, the regulator said it wanted to interdict and restrain Ithuba from installing Paytronix from December 2021 and from “going live” with its Paytronix Lottery System.

It also wanted the lottery operator to comply with the licence agreement by reverting to the terms of its pre-existing arrangement with IGT. The NCL also wanted Ithuba to pay the costs of the court application.

However, Ithuba was of the view that IGT is holding the national lottery operator to ransom, while elbowing out local players in the process.

Since 2015, Paytronix has been the ICT solutions provider for SA’s third national lottery operator, Ithuba.

Within the first three years of being appointed, Paytronix Systems managed the data operations of more than 1.6 billion transactions on Ithuba’s behalf, with a transaction value of more than R19.5 billion.

The company designed and continues to manage Ithuba’s mobile e-commerce platform, which enables lottery players to enjoy the online player experience.

In its statement, the NLC says it has a statutory duty to maintain, protect, monitor and support the integrity of the national lottery.

This involves continuously assessing and reviewing operations relating to the national lottery, thus making sure the interests of stakeholders are not compromised, it notes.

“In line with the Lotteries Act no 57 of 1997, as amended and the National Lottery Operating Licence, NLC receives proposals from the operator for amendments such as new games, channels of play and amendments to game rules and prize pay-out structures. These proposals are assessed and recommended to the board, which advises the minister on approval thereof.”

In November 2021, following a series of engagements with Ithuba, the NLC filed an urgent interdict against Ithuba over the validity of amendments made to the Lottery Technology Supply and Support Agreement, says the authority.

It adds the judgement handed down by the High Court affirms the authority and responsibilities of the regulator in ensuring the fair and transparent operation of the national lottery as follows:

  • Interdicting and restraining Ithuba from giving effect to the amendment to the Lottery Technology Supply and Support Agreement and installing a new system from 1 December 2021.
  • Directing Ithuba to comply with the licence agreement by reverting to the terms of its pre-existing arrangement with the minister of trade, industry and competition.

“The NLC remains committed to ensuring South Africa’s national lottery is a safe and trusted marketplace, by ensuring systems in place have the necessary assurance in place to safeguard that the interests of participants and the public at large are protected,” it concludes.

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