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Online gambling is 'ubiquitous' and enforcing a ban is a problem, parliamentarians are told
Online gambling was the subject of further committee discussions last Friday when Parliament’s trade and industry committee sat through yet another public hearing on the pros and cons of legalising and regulating the pastime.
Business Day reports that members of the committee discussed potential problem areas such as the prevention of money laundering, underage gambling and illegal gambling operators. Current legislation prohibits gambling via internet sites that offer casinos and poker, and wagering on non-South African betting sites is also not allowed.
Following the recommendations of a gambling review commission that internet gambling be regulated and taxed , the Department of Trade and Industry, together with the trade and industry committee, is trying to formulate legislative amendments to make this possible.
Committee chairman Joan Fubbs said online gambling could not be ignored and was ubiquitous in SA, whilst Democratic Alliance MP Geordin Hill-Lewis observed that "online gambling is a fact in SA. Prohibition is impossible and at the moment it is taking place in a completely unregulated environment and we are deriving no economic benefit from it.”
Pieter Smit of the Financial Intelligence Centre briefed the committee on possible vulnerabilities arising from online gambling and urged that online betting exchanges and online poker be prohibited. If they were allowed, operators would have to be subject to the regulatory measures as required by the Financial Intelligence Centre Act, he suggested, asserting that gaming facilities could be used by online punters to transfer funds from one person or location to another, increasing the risk of money laundering.
Such transactions would be difficult to trace and as it was not a face-to-face business, new technology would be needed to identify customers, he opined. Smit also hinted at measures to identify and exclude unlicensed operators from the South African market.
National Gambling Board representatives recommended that if legalisation is approved, the number of online gambling licenses should be restricted to manageable numbers and be strictly regulated. Licenses should only be valid for eight years and measures would be needed to protect gamblers against fraudulent operators and exclude underage or problem gamblers, they emphasised.
The Board again cautioned that excluding unlicensed operators would be a difficult challenge, and indicated that blocking South African access to illegal operators was both expensive and unsustainable. Cooperation with other licensing jurisdictions would have to be obtained in the case of illegal operators based in other countries, they said.
Experts from the Banking Association of SA warned that illegal operators often used front companies to conceal their real activities, and it would be difficult for banks to identify and differentiate between legal and illegal transactions related to internet gambling.

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