Friday , September 30, 2011 : Casino Enterprises fought the good fight, but has lost in South African courts
Casino Enterprises, the Swaziland-based company which operates veteran online gambling casino Piggs Peak, has lost its long-running legal battle on where internet gambling takes place in a landmark decision by the South African courts.
The company issued a statement this week advising that it had lost its latest round of litigation in the Appeal Court in Bloemfontein, and as a consequence will no longer accept South African action.
The Casino Enterprises statement reads:
"Further to our appeal, that was heard in the Appeal Court in Bloemfontein on 23 August 2011 where final judgment has been delivered, we regret to inform you that our appeal has been unsuccessful.
"With immediate effect Casino Enterprises (Pty) Limited trading as Piggs Peak Casino, Piggs Peak Poker, Piggs Peak Bingo and Volcanic Gold Casino will no longer accept bets from any players in South Africa.
"Should you have a positive balance in your Piggs Peak Casino account, please make a withdrawal.
"Please note: Our casino will only be accessible by players outside the borders of South Africa."
Casino Enterprise's plucky action against South African anti-online gambling authorities was based on the premise that online gambling takes place on the servers of the operator (who is in a location where online gambling is legal and authorised) and not on the hardware of the player (who may be in a country with a less enlightened approach).
After fighting its case through lower courts, the Court of Appeal was the last stand, and the Court's ruling effectively settles once and for all the question of where online gambling takes place from an official South African perspective.
The issue of whether online gambling may yet be made a legal and regulated activity in one of Africa's biggest economies is still on the legislative table. After years of research, review, procrastination and political debate the Gambling Review Commission has most recently recommended that online wagering be made legal, and a defined number of licenses issued.
However, government is still considering the review, there is a tortuous legalization process to survive, and observers have predicted that it may yet be years before any practical momentum is achieved.
At the core of the Appeal Court's decision lies the finding by Justice Jonathan Heher that gambling takes place where the player is, and not where the casino's servers are located. In making the ruling, the judge aligned himself with an earlier decision by Judge Neil Tuchten of the North Gauteng High Court.
“The prospective player is ‘seduced' in SA, he or she takes and activates the crucial decision to gamble here, he or she is impoverished here; the Internet casino intrudes upon the field of licensed operators here and it does so without payment of dues to the state,” said Heher in his ruling.
“If gambling takes place in SA it is of no consequence what means are employed to facilitate it and whether those means are employed outside the country.”
The South African market is a tempting one for online operators. The country has an advanced communications and banking infrastructure and land gambling, legal since 1996, has proved to be immensely popular, currently generating revenues around Rands 215.8 billion annually and paying Rands 1.6 billion in taxes.
The South African National Gambling Board is on record as threatening to prosecute both operators and punters once supported by a definitive and final judicial ruling. Until the Gambling Act in South Africa is amended, it now appears to have the backing of the courts in its war on internet gambling.