Retailers say lottery terminals are failing across South Africa, raising questions about the controversial emergency licence granted to Ithuba.
In spite of complaints by retailers and the public of problems with the sale of lottery tickets since a switchover to a new operating system on 1 June, Ithuba Holdings says it has “implemented a seamless transition in accordance with the approved transition plan”.
The problems resulted in people complaining on Facebook after the switch to the new software, as they were unable to buy tickets at many retail outlets countrywide.
Problems since switchover
Retailers in Durban, Johannesburg and Cofimvaba, a village in Transkei, confirmed they had experienced problems since the switchover.
Both retailers and customers complained that terminals in many outlets across South Africa were either slow, or out of order for days on end.
Online ticket sales and sales via bank apps do not appear to have been affected. Ithuba said complaints by some retailers that the “old system” was “much better than the new one were baseless”.
“Ithuba has achieved one of the smoothest system transitions ever recorded in the lottery industry, both locally and internationally,” the operator said.
“Ithuba transitioned seamlessly on 1 June, with all banking partners (Capitec, FNB, Absa, Standard Bank, Tyme Bank, Nedbank, African Bank, and Old Mutual), handheld partners, telecom partners (Vodacom and MTN), and e-commerce platforms (website and mobile apps) – supporting over 250 000 devices nationwide.”
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Controversial emergency licence
Ithuba Holdings has operated the SA lottery for the past 10 years, the maximum stipulated in the Lotteries Act and had not bid for the new fourth licence or the temporary one.
A sister company, Ithuba Lottery, applied for the temporary licence, but instead, Ithuba Holdings was controversially awarded a 12-month emergency licence by Trade, Industry and Competition Minister Parks Tau, who has oversight of the lottery.
Tau has yet to explain why he awarded the licence to a company that had not applied for it. The licence was awarded despite two damning court rulings.
Tau has used a 2015 amendment to the Lotteries Act, which gives the minister wide powers in certain circumstances.
Family links and Paytronix controversy
The new software, Paytronix, which is owned by Ithuba, appears to be the cause of the problems since the switchover.
Both Eric and Ben Carlos Mabuza, the husband and son of Ithuba CEO Charmaine Mabuza, are directors of Paytronix.
For the past 10 years, the lottery has been run on software owned by International Game Technology (IGT), which is a software provider for numerous lottery operators worldwide.
Fallout from legal battles and contract chaos
The National Lotteries Commission took Ithuba to court in 2021, when it unsuccessfully tried to oust IGT as its software provider and replace it with Paytronix.
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This led to a strained relationship between the two companies. When IGT’s contract with Ithuba ended on 1 June, IGT declined to extend its contract for the temporary licence, The Citizen has reliably learned.
IGT had partnered with Wina Njola in its unsuccessful bid for the new SA lottery licence. This left Ithuba scrambling to upgrade thousands of retail terminals countrywide.
There were 16 790 terminals in retail outlets in 2022, according to the National Lotteries Commission’s annual report for that year.
Ithuba’s support line has been inundated with calls from retailers complaining about problems, The Citizen was told.
‘Seamless transition’
“Ithuba has implemented a seamless transition in accordance with the approved transition plan. All Ithuba terminals have a dual Satadom (hardware inside retail terminals), one with IGT software and the other with Paytronix software,” Ithuba said in response to questions from The Citizen.
“On 1 June, the terminals were re-routed to the Paytronix Satadom, and our technical teams are in the process of removing the IGT Satadoms.
“Transitions inherently involve a series of technical and hardware adjustments, and Ithuba’s field support teams were prepared and positioned to deal with potential cases.”
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