Despite its strident objections to the lottery, Cosatu has emerged as one of the major shareholders in Gidani, the consortium recently awarded the licence to operate the national lottery.
In 2003 Cosatu made a submission to Parliament objecting to the introduction of the National Gambling Bill, which established the lottery, saying it would have negative consequences on the quality of life of the most vulnerable. Gidani is expected to make a profit of more than R40-million a year from lottery proceeds. Cosatu, through its investment arm Kopano ke Matla, holds 13,5% of Gidani.
Gidani’s technical partner, Greek multinational Intralot, is apparently being sued by the Russian government for receiving a $15-million advance to run the national lottery and failing to do so.
Gidani chairperson Bongani Khumalo told the Mail & Guardian that allegations that Intralot was being investigated were untrue. He said Intralot was one of the world’s best companies, operating national lotteries in several countries.
The National Lotteries Board has said that there was nothing “untoward” about the business partners comprising the consortium.
Trade Minister Mandisi Mpahlwa this week announced Gidani as the new company to replace Uthingo as the lottery operator when the latter’s seven-year contract expires in April next year. Key consortium participants include ANC national committee members Cyril Ramaphosa and Max Sisulu, and Chris Nissen, the former leader of the ANC in the Western Cape.
Other shareholders include Independent Electoral Commission chairperson Brigalia Bam.
Investigative magazine noseweek reported in October that Intralot, owned by controversial Greek tycoon Socrates Kokkalis, was being investigated for rigging the Greek national lottery and using betting games for money laundering. Khumalo claimed an investigation had found the allegations to be untrue. However, the Greek authorities have not confirmed this.
He said: “We are comfortable. There is no question about Intralot in terms of the allegations that have been made. The company went through a due process in every country that it is operating in. It underwent due processes as far as this bid is concerned and, like every other bidder in Gidani, it passed the probity test.”
In its 2003 parliamentary submission, Cosatu quoted research commissioned by Business Day in 2001. The research found that about 50% of adults in urban areas buy tickets, 40% of them earning between R800 and R4 000 a month.
The research found that some players were addicted to gambling and that most who spent more than R625 a month on the Lotto were single African men earning less than R4Â 000 a month.
Cosatu said it believed the lottery encouraged “gamblers to think they can only change their lives through luck, rather than helping us collectively solve the challenges we face”. This eventually leads to “the destruction of these people”.
Cosatu general secretary Zwelinzima Vavi said there was a “policy vacuum” on the lottery, despite his view that it was immoral and a second tax on the poor.
Cosatu’s position on the lottery and the implications of Kopano ke Matla’s investment in Gidani will be discussed at the November central executive committee meeting.
The DA and the Independent Democrats have slammed the awarding of the licence to Gidani as another example of the enrichment of an empowered elite. ID leader Patricia de Lille has called for an urgent investigation.
Mpahlwa this week said all four bidders had faced the same stringent conditions set out in the legislation, and that the tender had been close-run. He said a key distinguishing factor had been Gidani’s higher proposed contribution of 34% to the lotto distribution fund.
The National Lotteries Board’s Sershan Naidoo said the National Intelligence Agency had conducted security checks into the domestic and foreign business partners and reports of Intralot being investigated were “just allegations”.