The High Court in Mbombelo recently ruled against the online betting site, Lottostar and said it is illegal for the platform to offer bets on the outcome on any lottery – including the South African Lotto.
Betting World was granted leave to intervene in the case as a third respondent. This ruling may not wrap the case that has been in the courts since 2015, as Lottostar said that it would be appealing the ruling.
The Mbombelo court found that Lottostar is in contravention of the Lotteries Act of 1997 for running an illegal lottery (any game of chance not authorized by the National Lotteries Commission).
Lottostar was charged with taking bets on the outcome of the SA National Lottery and other international lottery draws. Both Lottostar and Betting World have bookmaker licenses that were issued by the Mpumalanga Gaming Board.
Ithuba, the official operator of South Africa’s lottery, said that illegal lotteries negatively impacted the amount of revenue collected for good causes as they did not contribute to the National Lottery Distribution Trust Fund. From revenue generated from official lottery games, Ithuba contributes around 27% of its funds to the NLDTP. In a statement, the National Lotteries Commission said:
“To ensure that one is not conducting an illegal lottery, one must verify such schemes with the National Lotteries Commission prior to making arrangements to conduct any competition or scheme. This judgement affirms the regulatory mandate of the NLC to build a regulatory environment for safe and sustainable lotteries where the interests of participants are protected.”
Ithuba Hails Landmark Judgement
Ithuba Holdings issued a statement as well, hailing the judgement as “landmark” one for the gaming sector.
The CEO of Ithuba, Charmaine Mabuza said: “We welcome the judgement which reaffirms that only Ithuba as the National Lottery operator can lawfully offer bets on the lottery. Ithuba has always been driven by the desire to offer maximum contributions towards the betterment of South Africans. Ithubahas touched many lives through its high-impact programmes and contributed over R1.8 billion to various socioeconomic initiatives and good causes through lottery ticket sales.”
Mabuza said that when betting companies encroach on the lottery terrain, they are essentially “siphoning” off funds that contribute to the country’s economy. She added that the judgement delivered by the court set a precedent for Ithuba to challenge any bookmaker that derives free financial benefits through accepting bets on the outcome of the National Lottery.
Mabuza added that even though Lottostar and Betting World carry licenses from the Mpumalanga Gaming Board, the Provincial Gambling Act does not empower provincial gaming boards to authorize bookies to accept bets on the outcome of the National Lottery draws.
Lottostar will Appeal High Court Decision
Yesterday, Lottostar said that it would appeal the high court decision, which ruled that it has to pay Ithuba’s legal fees as well. Lottostar has already given its lawyers instructions to open an appeal.