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―South African gamblers are providing a ready market for illegal international internet casinos, which have thrived online while the government has delayed the implementation of legislation to regulate Internet gambling.‖160
In May 2008, the South African Parliament approved new legislation regulating interactive gambling in South Africa. This Act (bill at the time) was drafted in response to a report161 conducted by South Africa‘s National Gambling Board, which found that the National Gambling Act of 2004 has to be amended to include regulations for interactive gambling. The National Gambling Amendment Act162 (NGAA) legalises interactive gambling in South Africa and establishes a licensing and regulatory system for this industry. The NGAA curtails the negative socioeconomic implications of an unregulated interactive gambling industry by establishing an effective and efficient regulatory framework, based on sound policy objectives that are in line with the government‘s policy framework on the regulation of all forms of gambling. The NGAA is still pending its promulgation by the legislature.
In terms of the report163 the primary objectives for regulating interactive gambling are as follows:
To protect the South African citizens and other players, by providing an opportunity for players to engage in interactive gaming legally and safely;
To preserve the country‘s reputation in the world community by reflecting international norms of good governance, preventing crime and promoting responsible gambling; and
To promote a successful interactive gaming industry in South Africa, by attracting reputable South African companies to locate their interactive gaming operations in the country.
Furthermore the report addressed the principal issues that express good policy, good law and good regulations for the interactive gambling in South Africa, it went on to discuss the principles for regulating online gambling in South Africa, this is in line with the way in
160 L Comins ‗Illegal online betting is thriving‘ available at http://www.amuse.co.za/2010/03/, accessed on 20 May 2012.
161 The 1999 Report, 5.
162 The 2008 Amendment Act.
163 The 1999 Report, 5.
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which land-based gambling has been regulated and the fact that interactive gambling has to be more explicit in its regulations.164 These principles included:-
Amending National Legislation, this required the National Gambling Act165 to be amended so as to include interactive gambling. In terms of the current state of affairs in South Africa, the National Gambling Amendment Act166 was established for this purpose; however it is not operating as yet.
Competence and the National Gambling Board, which suggested that interactive gambling be regulated nationally rather than provincially because the primary success of this industry will depend on the generation of international trust.
Taxation and other benefits to South Africa. With regards to this principal the National Gambling Board established the Interactive Gambling Tax Bill167, which when interactive gambling is legalised will regulate its taxation.
Licensing fees. The 2005 report168 indicated a list of the criteria that should be used in terms of licensing interactive gambling. (This issue will be further discussed at a later stage in this study.
Player protection. The success of interactive gambling is very much dependent on the players having integrity in the games that they play and trusting the site that they have made a decision to use. Not only is it integrity that is an issue, but problem gambling is also addressed as an integral part of protecting players.
Underage gambling, this is a rather difficult issue considering there can be regulations in place, however there is only so much that can be done to prevent minors from actually using a computer at home and gambling. Therefore the report attempts to find a system in which minors can be prevented from gambling online by the registration process.
South African citizens, when considering this issue it is important to look at other countries that have attempted to regulate interactive gambling and how they have managed to control their citizens gambling. In this instance, one can look at the Australian system whereby their citizens are excluded entirely from using the
164 The 1999 Report, 5.
165 The 2004 Act.
166 The 2008 Amendment Act.
167 Interactive Gambling Tax (Administration) Bill of 2008.
168 The National Gambling Board ‗Report on the Regulation of Interactive Gambling‘ 10 October 2005.
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countries interactive sites; this has the advantage of bringing in money to the country rather than circulating the money that is within the country. However, many people have access to the internet and can therefore use that to gamble on foreign websites.
Needless to say, it is also possible to permit South African citizens to play the games, but the issue of taxation would arise, that is, whether to tax higher or the same as foreign players.
International recognition, this applies to the principles agreed by the Gaming Regulators European Forum (GREF) as well as those articulated by the Australians.
This principle has to be in accordance with the World Trade Organisation (WTO) so as to avoid conflicts such as the case of Antigua and the US.169
Crime prevention is a very essential issue with regards to interactive gambling, according to the report it ―is a matter of independently ensuring the integrity of all electronic systems to avoid fraud; of protecting player privacy to avoid improper use of information.‖170
Banking issues, this will require examination by the Reserve Bank on the foreign exchange regulations. And further it will also require the licensed operators to arrange with the different banks a form of payment for online gambling for players.
Financial Solvency, all operators granted licenses would have to prove that they are financially solvent and that they are stable. This means that they cannot be or have been sequestrated at least 10 years prior to applying for the license.
Dispute Mechanisms, include the players being able to report their complaints to a dispute resolution board and these issues need to be dealt with expeditiously.
Probity investigations will need to be conducted on applicants for licenses, the employees as well as the creators of gambling software. Licenses may be revoked if there is a violation of any law.
These regulations have been provided for in the Amendment Act and other reports have been conducted, however it is important to mention that from the time that they were developed in the first report they were and still are significant to the success of the industry and will continue to be developed with time and as the interactive gambling industry grows.
169 Antigua v U.S. at World Trade Organisation (WTO), the appeal- Internet gambling case, 2007.
170 The 1999 Report, 16.
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