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IS SOUTH AFRICAN ONLINE GAMBLING LEGALISATION CLOSER?

Tuesday August 16,2011 :  Review commission briefs MPs and recommends legalisation
 
Back in 2009, the online gambling market in South Africa was estimated at Rands 320 million (around GBP 28 million), a number that has likely increased, given the wider availability and lower cost of effective internet connections.
 
But it is a market hobbled by largely ineffective laws prohibiting the pastime, and procrastination by a government that has so far not moved to regulate despite extensive study and positive recommendations over a number of years.
 
The National Gambling Board, bound by current law, continues to enforce the laws against online gambling when it can, moving against advertisers and occasionally players. Some Rands 3 million has reportedly been confiscated and paid into a government trust account.
 
Last week it appeared that the regulatory initiative was again moving slowly forward as the latest review commission briefed parliamentarians on the Trade and Industry Committee and recommended that all forms of online gambling, including poker and all betting, should be brought into the national gambling regulatory fold and made legal.
 
The Weekend Argus newspaper quoted review commissioner Stephen Louw as saying: “The big elephant in the room is internet gambling. The danger is that with the offer of the carrot, it may grow unexpectedly. But already any one of us can log on at night and place hundreds of bets."
 
Louw and his fellow commissioners recommended that a limited number of online licenses be initially awarded, subject to stringent conditions to ensure player protection and fairness, along with advertising rights for licence holders.
 
The commission suggested that the financial industry be involved in enforcement moves against any operator in the market that did not possess a licence, and that the regulations cover all aspects of online gambling including casino and mobile activity.
 
Commissioners specifically cautioned against piecemeal regulatory moves in an apparent reference to reported proposals being drafted to legalise interactive gaming, and not online and mobile gambling as a whole.
 
The provincial Western Cape Gambling Board and Phumelela Gaming and Leisure offer bets via cellphones or internet banking, commissioners pointed out, opining that the use of cellphones to bet is no different to using the internet. Yet despite this, land-based bookmakers and totalisers are not subject to the same restrictions or protection that future licensed interactive gambling operators would be expected to meet.
 
The commission noted that total bans on online gambling are difficult to enforce.
 
National Gambling Board CEO Baby Tyawa told the parliamentary committee that her department had worked with the Reserve Bank and banking regulatory authorities to act against illegal online gambling by targeting winnings. She said the focus had been on the “big number winners”, but that the intention was to widen the scope of this enforcement.
 
Tyawa, who expressed support for the regulation of internet gambling, said: “We depend entirely on the various regulators,” and pointed out that government was losing out on useful tax revenues that could flow from a regulated industry.
 
South Africa's legal [land] gambling industry generated Rands 15.9 billion in 2009, with a further Rands 2,2 billion flowing from national lottery activities. This netted taxes of Rands 1.5 billion, or Rands 1.92 billion if VAT was included, making gambling taxes an important source of national government income.
 
Land casinos account for 80 percent of the taxes and 90 percent of the almost 60 000 jobs in the industry, she added.
 
Members of the parliamentary opposition have recently called for the regulation of online gambling to be addressed and finalised in a regime that should permit online registration, allow servers to be located anywhere and also embrace internet poker and betting exchanges.



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