A lotto trouble: marketing firm’s claims against new lottery operator land on minister’s desk

A company involved in Sizekhaya Holdings’ successful bid to run South Africa’s national lottery has urgently appealed to Minister of Trade, Industry and Competition, Parks Tau, to step into what has become an increasingly acrimonious dispute.

SocialPro — the marketing firm that helped shape the bid’s strategy — now accuses Sizekhaya and its consortium partner Goldrush Group of a series of breaches that it says undermine the credibility of the licence award.

These include its disputed status as a key contractor, the alleged unauthorised use of its intellectual property, non-payment for work done after the award, and an instruction that SocialPro says could have triggered a damaging audit finding.

Goldrush, however, has dismissed the allegations, insisting it has paid all amounts due and that any working relationship with SocialPro ended the moment the licence was awarded. While SocialPro might have continued assisting “in good faith”, Goldrush maintains that no post-award agreement existed. The company says it has since notified the National Lotteries Commission (NLC) of the termination of SocialPro’s services. Goldrush also accuses SocialPro of pedalling its complaint around to pressure Sizekhaya.

Commenting on behalf of the consortium, Goldrush executive Michael Nurick told amaBhungane that: “Goldrush Group and Sizekhaya Holdings categorically reject the false and misleading claims being circulated by SocialPro.”

He said that since Sizekhaya’s decision not to enter into a contract with SocialPro the marketing company had embarked on a campaign to pressure Sizekhaya into making payments to it: “SocialPro is not legally, ethically or contractually entitled to those payments.”

SocialPro strongly disputes this view and has taken its complaints to the minister and the commission, so far without gaining much traction.

Ministerial escalation

SocialPro played a central role in the consortium’s bid — developing the marketing plan, game design concepts, sports pools, business plan narrative, financial modelling, research and corporate social investment (CSI) contributions. Minister Tau publicly commended the strength of Sizekhaya’s marketing submissions when defending the licence award.

Yet, in a letter dated 1 October 2025, SocialPro’s managing director Zahid Shaik told the minister that they had since “faced exclusion, budget suppression, non-payment, and unauthorised use of our intellectual property”.

“Minister, given your own public statements commending the Sizekhaya marketing plan as a decisive factor in the licence award, the failure to address this matter risks serious reputational harm to both the commission and the department,” he said.

Shaik also wrote to the National Lotteries Commission numerous times between September and November, accusing Sizekhaya of failing to “honour binding undertakings given to the commission”. He argued that the issues “strike at the integrity of the licence award and compliance with both the Lotteries Act and the licence conditions”. He received no substantial response.

Responding to amaBhungane’s questions, Tau’s spokesperson Kaamil Alli said the matter was being addressed by the commission, which had been in contact with SocialPro.

“The minister will await an update from the NLC on the matter should it require his further attention.”

Commission spokesperson Rudzani Tshigemane said it saw the dispute as commercial in nature.

“SocialPro was initially engaged by Goldrush under a Service Level Agreement (SLA) to provide marketing and branding services for Sizekhaya’s bid for the fourth licence. The SLA expired upon the licence award in May 2025.

“The parties had an in-principle agreement for the conclusion of potential future ‘agreements’ for marketing services post the award of the licence. No new post-award agreement was reached, leading SocialPro to allege wrongful exclusion, IP infringement and breaches. Sizekhaya denies any ongoing relationship and has notified the NLC of the termination of its agreement with SocialPro under Clause 22.3.1 of the licence,” Tshigemane told amaBhungane.

Shaik, however, maintains otherwise, alleging that its relationship with Sizekhaya deteriorated only after he raised concerns about what he terms governance breaches.

Serious concern

One of the most serious concerns raised by SocialPro relates to an alleged instruction to cut Sizekhaya’s planned pre-launch marketing budget from R74-million to R35-million with only 24 hours’ notice.

The pre-launch period is a critical handover window in which the new operator builds public awareness, stabilises operations and prepares for the transition. Altering the budget without notifying the commission might amount to reneging on the commitments made in the bid, and could trigger an audit finding.

Shaik provided amaBhungane with an email requesting that SocialPro re-scope activities for R35-million. However, according to Goldrush’s Nurick, internal budget drafts were merely modelled for discussion, and ultimately no changes were made.

Shaik insists that the budget only remained intact because he flagged the issue to Sizekhaya executives, who failed to act. Even if the reduction was abandoned, he argued that an audit was still warranted for the “near miss”.

The National Lotteries Commission said it had received no reports indicating that the budget had been cut, and Nurick said no report was necessary.

Tshigemane said: “The Licence Agreement commits Sizekhaya to a marketing plan and expenditure that were proposed in their Licence Application. The Regulatory Division of the NLC monitors and audits the marketing activities and expenditure against the Licence Agreement commitments on an ongoing basis.

“The NLC will hold Sizekhaya to the marketing plan and budget as per the Licence Agreement from the date that it assumes lottery operations.”

Intellectual property and alleged unpaid work

Shaik further alleges that multiple elements used in Sizekhaya’s bid — including proposed new games, the website approach and grant funding strategy — remain SocialPro’s intellectual property unless transferred through a separate written agreement.

He also claimed that Goldrush owed SocialPro around R450,000 for outstanding work.

“Invoices were sent after we got approval from the project office, and even then we wanted to walk the finance team, other stakeholders and Exco line for line as to what was done,” Shaik said.

Nurick rejected this, saying Goldrush had offered to resolve any dispute around payments or intellectual property ownership through arbitration, but SocialPro failed to initiate the process — a claim SocialPro denies.

No chief marketing officer

A further point of contention is Sizekhaya’s alleged failure to appoint SocialPro’s head of marketing, Mandla Mbau, as chief marketing officer (CMO) despite nominating him in the bid.

According to Shaik, the appointment of a chief marketing officer was a weighted criteria in the request for proposal (RFP).

“It is peculiar that all other board appointments have been made except this one, especially given that the chief marketing officer controls the largest expenditure across the seven-year licence period — estimated at over R3.5-billion,” Shaik said.

“The chief marketing officer role is arguably the most critical executive function, as revenue generation is directly linked to marketing.”

Shaik added: “Any deviation from [the bid] must be brought to the attention of the National Lotteries Commission as per the request for proposal and draft licence conditions. Mandla Mbau, a SocialPro employee, was part of this ‘trade exchange’ on the basis that Sizekhaya lacked the expertise. This was a good faith agreement.”

Nurick said Sizekhaya was not obliged to appoint anyone in particular as chief marketing officer.

“Sizekhaya is a commercial entity and can appoint suppliers and employees of its choosing. The National Lotteries Commission does not choose or ‘appoint’ suppliers for licence operators.”

Key contractor

At the heart of the dispute is whether SocialPro held a legitimate role after the licence was awarded.

SocialPro argues that it was formally recognised as a key contractor during the bid stage and again after the award, having submitted information for probity checks and being asked to sign a key contractor agreement.

The company argues that, based on its undertakings to the National Lotteries Commission that it made in the bid submission and instructions from Sizekhaya — despite the absence of a contract — SocialPro delivered the work on a “good faith” basis.

But Nurick downplayed the status of the SocialPro’s designation as a “key contractor” in the bid, saying it was a mechanism through which the commission could vet individuals and entities to ensure they were fit and proper.

“This does not oblige or compel licence applicants to continue to use, appoint or contract with key contractors in perpetuity,” he said.

“The undertaking contemplated Sizekhaya and SocialPro entering into ‘agreements’ for the future provision of marketing services. This was because at that time, it was anticipated that a new agreement would be reached with SocialPro to become a key contractor for marketing services in respect of Sizekhaya’s future preparations for, and operation of, the licence. However, this undertaking did not oblige Sizekhaya to contract with SocialPro (as key contractors can be changed at any time).”

According to Nurick, the decision not to continue with SocialPro became apparent to them, and “in August 2025 SocialPro began raising unspecified ‘governance complaints’ alongside demands for payment”.

As a result, Nurick said Sizekhaya wrote to the National Lotteries Commission to terminate “any applicable” key contractor relationship it had with SocialPro.

But, according to emails shared with amaBhungane, SocialPro began raising governance concerns (such as the proposed cut to the marketing budget) to Sizekhaya and Goldrush well before August — and Shaik alleges that this is what soured the relationship.

It is understood the parties will enter a mediation process. DM