It is back to the drawing board for the trade and industry minister after a judge cancelled his awarding the seven-year contract to manage the Lotto to ANC heavyweights.
Pretoria high court Judge Willie Seriti ruled that the process followed by the National Lotteries Board in awarding the licence to Gidani was flawed.
The ruling in favour of Uthingo Management yesterday cancelled the awarding of the lottery licence to Gidani, a consortium led by JHI Real Estate managing director Bongani Khumalo. It includes ANC heavyweights Max Sisulu, Chris Nissen and other prominent figures of the party.
The court's ruling follows last month's review proceedings instituted by Uthingo, the lottery operator, in the Pretoria high court.
Uthingo was not satisfied with the manner in which the decision was made by Mandisi Mpahlwa, the minister of trade and industry, to appoint Gidani as the new lottery operator.
Uthingo accused the minister of not satisfying himself that the investigation into the probity of the new lottery operator Gidani was properly undertaken.
Uthingo's advocate, Jeremy Gauntlett SC, told the Pretoria high court last month that the minister relied on a security clearance from the National Intelligence Agency (NIA) on Gidani, a reliance Gauntlett referred to as an unauthorised delegation of duties by Mpahlwa.
The Lotteries Act states that in considering whether to grant the licence the minister should take into account whether any person undertaking to manage the business was a fit and proper person to do so.
Uthingo was pleased with the court's ruling, saying "the outcome of the court case has vindicated our decision to request a review of the licensing process".
In his response yesterday, the minister promised to study the court's judgment.
He said in a statement: "I have to look at the contents of the judgment so that a decision on the way forward can be made."
Mpahlwa said, from what he understood, it seemed that he did not examine every individual shareholder of Gidani during the awarding of the licence.
The court's decision effectively puts the whole lottery licence back in the minister's hands.
The options faced by the minister are to hand the lottery operations back to Uthingo to run for another seven-year period, to start the process all over again or to get the two groups into a compromise deal to run the lottery.
Uthingo's licence expires at the end of the month.