NATIONAL NEWS - Mbombela-based lottery retailer LottoStar has been declared illegal, according to a high court judgment handed down on Tuesday.
The High Court in Mbombela, Mpumalanga declared the activities of LottoStar illegal, and has interdicted them from offering bets on the outcomes of any lottery draws, the National Lotteries Commission (NLC) said in a statement.
The NLC said the matter was first presented to the courts in 2015.
The judgment found LottoStar to be in contravention of the provisions of Section 57 of the Lotteries Act of 1997. The Act stipulates anyone who participates in, facilities or benefits from a lottery that has not been authorised is guilty of an offence, as well as anyone who organises or provides any games of risk.
Any game of chance not authorised by the NLC is illegal.
LottoStar was licensed and regulated by the Mpumalanga Economic Regulator, and holds a Bookmakers’ Licence issued by the regulator.
It has sponsored a number of television shows, such as The Bachelorette and Love Island. Their website is still very much active, however, despite the judgment, with recent draws still being broadcast.
No good cause contributions
The NLC explained the National Lottery contributed around 27% of funds raised by the National Lottery Distribution Trust Fund (NLDTF). This is “distributed to good causes to uplift communities across South Africa”.
The NLC said illegal lotteries such as LottoStar did not contribute to the NLDTF, and “negatively impact[ed] the amount of revenue collected for good causes”.
Any lotteries suspected to be illegal must first be verified by the NLC, the statement added.
“This judgment affirms the regulatory mandate of the NLC to build a regulatory environment for safe and sustainable lotteries where the interests of participants are protected.”
Pending NLC investigations
Despite the NLC’s commitment to raising funds for good causes, news publication GroundUp has cried foul over a number of contentious alleged spending sprees funded by the commission.
In December last year, GroundUp reported a grant of R5.5 million had been given by the NLC to a Limpopo organisation, Uprising Youth Development, which said it never received the money – and never applied for the grant.
The donation was said to have funded a project in the Northern Cape, the NLC told Parliament. However, no details of the project existed.
Another report by GroundUp alleged millions of rand from a Lottery grant to build an old age home in Mpumalanga were used to fund a luxurious home for an NLC board member in the North West.
An article also emerged alleging the NLC paid out millions in grants to organisations already involved in questionable and unfinished Lottery-funded projects.
This was revealed in a leaked list of payments made from April to December 2019, GroundUp reported in May 2020.
The NLC’s Pretoria offices were raided by the Special Investigating Unit (SIU) in December last year, following allegations of corruption going as far back as 2014.
At the time, the SIU said it was looking at all transactions from January 2014 to November 2020.
The raid took place weeks after former Hawks spokesperson Hangwani Mulaudzi resigned, amid allegations that his non-profit organisation received R3 million from the NLC to build a sports centre for the Mashamba community in Limpopo.
The NLC defended grant, however, saying the NLC did not allocate grants to individuals but to “registered NGOs/NPOs that work for the public good.”
