Exactly four years ago, the Gambling Authority issued out a tender for the first-ever national lottery. It attracted several bidders. The tender, as explained by the Gambling Authority then, would completely transform the gambling industry and bring about several economic opportunities likely to make an impact on the economy.
After about four years of tender evaluation, the Gambling Authority finally made a decision, led by its captain, Thulisizwe Johnson. In that decision, Grow Mine Africa (Pty) Ltd, trading as Dineo tsa Pula, was announced the preferred bidder for the national lottery on 4 June 2020 while Ithuba Solutions (Pty) Ltd was named the reserve bidder for the purpose of awarding the first-ever Botswana National Lottery for a period of 10 years.
It finally dawned on the nation that indeed the national lottery was a reality and Batswana celebrated, more so that the preferred bidders, Grow Mine Africa, was made up of the largest-ever 100 percent citizen consortium. It was believed that proceeds from the multibillion pula lottery industry would be enjoyed by the natives.
But just when the nation expected a rollout of the lottery, Ithuba Solutions challenged the selection of the preferred bidder, leading to a delay in the licence negotiations which, if successful, would warrant commencement of the rollout. The application by Ithuba to have the selection of Grow Mine nullified delayed progress for a few months but curiously, Grow Mine and the Gambling Authority commenced licence negotiations that Ithuba sought to stop at the High Court.
After Grow Mine won round one, which fully opened licence negotiations, another obstacle emerged. Grow Mine shareholders got into internal fights over the control of the company. Former Chairman, Chandra Chauhan, took the fight to former Managing Director (MD) Percy Raditladi, wanting him out as MD and to relinquish some company assets and intellectual property. But Raditladi would not budge.
The infighting led to instability and divisions within Grow Mine. Instead of looking at the bigger picture of fully securing the national lottery, emotions and personal egos got the better part of the shareholders. The infighting created discomfort and skepticism in the market, among potential funders as well at the Gambling Authority itself. The discord among Grow Mine did not abate and some resigned from the board as backstabbing became the order of the day.
Chandra Chauhan, former Chairman of Grow Mine, also Sefalana Group Managing Director (MD), represented the interests of Sefalana, which is a major shareholder at 40 percent. Further, Sefalana was more than just a major shareholder but a financial guarantor, a critical aspect, which was fundamental to securing the lotto licence. But in the mayhem, Chauhan revoked Sefalana’s financial undertaking as guarantor. Capital needed for the rollout of the national lottery is estimated at around P100 million, and of Grow Mine shareholders only Sefalana has the capacity for that king’s ransom amount.
More trouble awaited Grow Mine because its selection as preferred bidders had come with heavy conditions. It was subject to successful negotiations and conclusion of a licence agreement between the Authority and itself as the preferred bidder. However, on 26 July 2021 the Gambling Authority announced that negotiations between itself and Grow Mine were unsuccessful and that the Authority had decided to revoke Grow Mine’s status as the preferred bidder as a result.
Investigations by The Business Weekly & Review established that the real reason was that Grow Mine had failed to raise the P100 million needed as capital or to present a cash-rich financial guarantor. This happened when Grow Mine was in the middle of its licence negotiations, which were expected to be closed within months. The Gambling Authority terminated the process, and announced that the reserve bidders, Ithuba Solutions, would now be promoted to preferred bidders.
This delayed the rollout of the national lottery, because it means the Gambling Authority has to restart negotiations that could take months or a year to conclude. But there is another challenge. Grow Mine won’t accept the termination and is actually appealing it. The appeal process, according to the Request for Application (RFA,) is that Grow Mine will appeal to the Minister of Investment, Trade and Industry, Mmusi Kgafela, who will then assess the matter and perhaps take a decision to either agree with the Authority or reverse its decision. The process will take time because the ministry will conduct its own investigations before deliberating on the matter, which will delay the rollout of the national lottery further.
On the sidelines, Ithuba – which is now automatically and officially the preferred bidder – is eager to commence the licence negotiations.
But Ithuba has to await the final verdict by minister Kgafela, a decision that may or may not favour Ithuba. The minister may decide to reverse the decision and give Grow Mine a second chance. This would also raise another problem. Ithuba would not allow that and will run straight to court, more so that they have already been publicly announced as the preferred bidders following termination of Grow Mine. If Ithuba goes to court, the process will delay the rollout of the national lottery longer, perhaps by up to a year.
Another obvious factor is that Grow Mine believes that the Gambling Authority decision was unjustified and that it should have given them time to raise capital or secure a financial backer. So, should the minister decide to rubberstamp the Gambling Authority’s decision, Grow Mine will run to court to try to seek to reverse the Authority’s decision to terminate the former as preferred bidders. It is a process that could also take up to a year.
Still, Ithuba would also not sit and fold its arms. As the new preferred bidders, they would fight to the end, adding to delays. As a result, the national lottery – which was expected to change lives, create unimaginable economic activity and contribute to the Botswana GDP – is nowhere close to beginning, thanks to bruised egos of powerful men.
Two weeks ago, this publication sent a set of questions to trade minister Kgafela to try and understand the process of appeal and how long it may be before he makes a decision. Kgafela has not responded to the inquiry despite repeated follow-up phone calls.
At the Gambling Authority, Thulisizwe Johnson, the CEO, did not respond to specific questions either. The Business Weekly & Review would had wanted Johnson to confirm whether it would be correct to say that the national lotto licence negotiations could have been completed this year save for disputes surrounding selection of the preferred bidder and other subsequent decisions. Further, Johnson did not respond to whether the Authority had initially set itself specific timelines within which to complete the licence negotiations for the lottery national to be rolled out.
When The Business Weekly & Review engaged the Chairman of Ithuba Todd Mangadi and his Grow Mine counterpart Carthage Matlhaga, it emerged that they both believe they deserve to the preferred bidder and and each man vowed to fight with all his might to secure the status. This could mean that whatever the minister decides, it will be contested in court by whichever party the decision would not have favoured, putting the rollout of the national lottery further away. Observers say taking all this into consideration, the rollout should not be expected before 2023 or even 2024.
