National lottery operator Ithuba has been dealt a blow in its attempt to switch software providers without the approval of the regulator, the National Lotteries Commission (NLC).
ITWeb recently reported that NLC filed an urgent injunction request in the courts in October to prevent Ithuba from being replaced IGT, a global company that has been providing software services to the lottery provider since 2015.
In a statement released today, the NLC says it “welcomes and endorses the decision taken by the Gauteng Supreme Court on Friday, December 3, 2021, to ban and prevent the national lottery operator Ithuba from changing their technology partner and gaming platform for the South African national lottery without authorization from the National Lotteries Commission, the regulator of lotteries and sports pools in South Africa, and that of the Minister for Trade, Industry and Competition”.
Everything was ready for Ithuba to migrate its software platform to local software service provider Paytronix.
ITWeb understands that a €250 million deal with Paytronix was made before the injunction was launched by the NLC at 11am.
It was the NLC’s argument that by designating Paytronix as a service provider, Ithuba acted illegally and violated the lottery technology supply and support agreement.
In court documents, the regulator said it wanted to ban and ban Ithuba from installing Paytronix from December 2021 and going “live” with its Paytronix lottery system.
It also wanted the lottery operator to abide by the license agreement by reverting to the terms of its pre-existing agreement with IGT. The NCL also wanted Ithuba to pay the costs of the lawsuit.
However, Ithuba believed that IGT is holding the national lottery operator to pay ransom while crowding out local players.
Since 2015, Paytronix has been the ICT solutions provider for SA’s third national lottery operator, Ithuba.
Within the first three years of his appointment, Paytronix Systems managed the data operations of more than 1.6 billion transactions on behalf of Ithuba, with a transaction value of more than R19.5 billion.
The company designed and operates Ithuba’s mobile e-commerce platform, which allows lottery players to enjoy the online player experience.
The NLC states in its statement that it has a legal duty to maintain, protect, monitor and support the integrity of the state lottery.
This means that the transactions related to the state lottery are constantly assessed and revised, so that the interests of stakeholders are not harmed, it notes.
“In accordance with Lottery Act No. 57 of 1997, as amended, and the National Lottery Operating License, NLC receives proposals from the operator for changes such as new games, play channels and changes to game rules and prize payout structures. These proposals are assessed and recommended to the board, which advises the minister on approval.”
In November 2021, following a series of agreements with Ithuba, the NLC filed an urgent injunction against Ithuba due to the validity of changes made to the Lottery Technology Supply and Support Agreement, the authority says.
It adds that the Supreme Court ruling affirms the regulator’s authority and responsibilities in ensuring the fair and transparent operation of the national lottery as follows:
- Prohibit and prevent Ithuba from implementing the Lottery Technology Supply and Support Agreement amendment and installing a new system from December 1, 2021.
- Instruct Ithuba to comply with the license agreement by reverting to the terms of the pre-existing agreement with the Minister of Trade, Industry and Competition.
“The NLC remains committed to ensuring that South Africa’s national lottery is a safe and trusted marketplace, by ensuring that existing systems have the necessary safeguards in place to ensure the interests of participants and the general public be protected,” it concludes.