3.26.10 – The South African government's long-running flirtation with online gambling legalization was once again front and centre in the country this week as yet another round of public hearings took place, this time before the government's Gambling Review Commission in the coastal city of Durban.
The government has dallied through several years of in-depth research, hearings, political debate and fact finding missions for politicians but has yet to implement legalization aimed at regulating and licensing the pastime. South Africans have become important players as software developers and operators in an international industry worth billions of dollars a year, and the potential rewards attached to becoming a credible regulatory jurisdiction and support centre are substantial.
Meanwhile, the Commission was told this week, South African gamblers are providing a ready market for offshore international Internet casinos and poker rooms, which have openly advertised in the country with apparent impunity. Other concerns raised were about the prevention of money laundering and under-age gambling, the handling of problem gamblers and a rise in the prevalence of sports gambling.
The Commission is hosting public hearings across the country to gauge the socio-economic impacts of gambling and the effectiveness of policy and the proposed regulatory framework.
The news group IOL reports that Wayne Lurie, an attorney who was a special adviser to a 2004 committee which drafted a comprehensive report on interactive gambling for the Department of Trade and Industry, said the country was in a "legal quagmire" over the issue of online gambling and the Interactive Gambling Act, which was promulgated in 2008.
The act, providing for 10 online gambling licensees-operators, has not yet been implemented because adjoining regulations still need to be approved by the Minister of Trade and Industry, he said.
"We have casinos operating from offshore in the country and if we scratch the surface, we will find illegal interactive casinos," Lurie said.
"The industry cries out for regulation. Unlike land-based environments, every transaction can be monitored and the exact tax can be monitored. It's the easiest environment to regulate."
Lurie said there was "no strong ban of interactive gambling… that will stand up in court. This needs to be addressed urgently. It's embarrassing to the legislature."
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Tyrone Dobbin, a bookmaker who runs Great Odds, which uses the Internet as a communication tool for legal betting, said he hoped the government would not prohibit online gambling, which would drive it underground.
Dobbin claimed that online casinos were being run from licensing jurisdictions like Gibraltar, Malta and the Isle of Man by South Africans who hired postal addresses there but targeted the local market.
"I watch these foreign illegals establishing a foothold in the country without the benefit of tax," said Dobbin. "They are moving into our borders where the authorities are not able to regulate."
IOL reports that a director of the National Council on Problem Gambling, Raj Govender, said he was concerned about the rise in sports betting, gambling-linked suicides and casinos that entertained banned gamblers. He claimed banning was not effected in casinos until the gambler won money, which was then confiscated.
The hearings continue.