01/09/2012 : FOREIGN OPERATORS STILL ACTIVE IN THE SOUTH AFRICAN ONLINE GAMBLING MARKET
Despite threats and court cases, SA internet punters are still gambling
During 2011 a long-running court battle between the South African authorities and online gambling operator Casino Enterprises finally produced a ruling that proved unpopular with SA internet punters – online gambling in South Africa takes place at the point of consumption (i.e. on the player's device) and is therefore at present illegal in the country except for a few licensed sports betting sites.
That decision is subject to change; the South African government has been apparently endlessly researching and debating the regulation and licensing of the pastime but has yet to pass the necessary legalization. But for now, online gambling by South Africans… and offering online gambling to South Africans… is illegal.
Some operators like Casino Enterprises and African Palace now bar South Africans from their sites, but there are many others that continue to service the market.
The official warnings and court decisions do not appear to have deterred either online gamblers or offshore operators, according to a report this week in the local publication ITWeb, which did some investigative research and easily found a number of sites that were South African-targeted through marketing and currency, and easily accessible to local punters.
The attraction is there; gambling is a multi-billion-rand industry locally, with punters wagering Rands 215.8 billion in the year to March 2010, from which the government earned Rands 1.6 billion in taxes from licensed and mainly land operators, according to the latest figures from the National Gambling Board.
ITWeb attempted to contact a number of the sites that it found in a search for comment, but was reportedly ignored. The publication named five online casinos from which it tried to elicit a response without success, all well-known in the online gambling industry, and all allegedly advertising their offerings through locally registered domains, and dealing in SA Rand currency.
It should be noted that ITWeb did not physically test whether it was possible to place a bet on any of these sites, fearing that by doing so it would itself break South African law.
The legalization debate on internet gambling has been ongoing in South African official circles since at least 2007, with ‘fact-finding’ visits to successful international regulators and extensive research.
In more recent developments, the Department of Trade and Industry tasked a Gambling Review Commission to study the subject and report back to government. Towards the end of 2011 the Commission presented its report, recommending that online wagering be made legal, and the issue of at least ten licenses.
Despite this, local legislative experts have estimated that red tape and other bureaucratic processes could delay any practical legalization for the next two years, even without political ambivalence and procrastination.
If legalization happens, any company that has been offering online gambling to South Africans in defiance of the law over the past ten years could find itself excluded from any possibility of obtaining a licence, observers warn.
Following the Casino Enterprises case, the Ministry for Trade and Industry was unequivocal in its warning to offshore operators, advising in a statement:
“We are resolute that all illegal gambling activities that take away opportunities for the country to generate revenue and subject punters to the risks of gambling without security will be shut down, and all persons and entities found to be offering the RSA public such unlawful activities will be blacklisted and denied opportunities to operate lawfully in the country.”
The Gauteng Province Gambling Board directly cautioned online gamblers, warning them that they face the risk of having their winnings forfeited to the state, and that the law allows for sentences of up to 10 years imprisonment, a Rands 10 million fine, or both.