Finance MEC taken to court

Belinda Scott

Belinda Scott

Published Aug 24, 2016

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Durban - The KwaZulu-Natal Premier, Willies Mchunu, is engaging with stakeholders in the gambling sector and taking legal advice to map the way forward, his office has said.

Mchunu’s spokesman, Ndabezinhle Sibiya, told the Daily News this in response to questions relating to the previous premier Senzo Mchunu’s decision to write to lawyers instructing them to withdraw a review application to the Pietermaritzburg High Court by Senzo and the MEC for Finance, Belinda Scott.

The application was for a review of the previous KwaZulu-Natal Gaming and Betting Board decision to grant licences for electronic bingo terminals (EBTs) in the province.

The MEC, who replaced the board with a new one, says the former board’s decision to grant the licences was “irregular and illegal” and should be set aside.

The casino industry and other parties joined the court action with additional issues and the case has been deferred, with no indication of when it will be back in court again.

Now, the battle for electronic bingo has taken on another dimension, with one Ladysmith businessman, Phelelani Percy Shabalala, the director of Poppy Ice Trading (a member of The Bingo Association of South Africa), taking high court action against the MEC in a bid to strip her of her powers that give her responsibility for gambling. Shabalala has a licence for 90 electronic bingo terminals, but cannot implement these because of the impasse.

He contends in his papers that the decision by Premier Mchunu to retain Scott as the MEC responsible for gaming and betting is “unlawful and irrational” because of an alleged conflict of interest, citing bias in favour of casinos and horse race gambling: claims which the MEC has emphatically denied, saying the allegations were “scurrilous and vexatious” and were with the legal department.

The Daily News has had sight of a letter sent from the previous premier Mchunu to a Pietermaritzburg company of lawyers instructing them to withdraw the review application.

He wrote that, in the opinion of advocate TG Madonsela SC, whose advice he had sought, the grounds on which the review application was based and the platform on which the decision taken by the Board had been challenged, did not enjoy good prospects of success.

The advocate’s advice was that the premier and the MEC were not aggrieved parties – and he disagreed with the allegation that the former board had granted the licences unlawfully and/or irregularly.

Two days after signing the letter to the lawyers, Mchunu resigned as premier.

The Daily News asked the new premier’s spokesman if the former premier’s instruction would be actioned, and was told the new premier was now engaging with stakeholders in the gambling sector.

The Bingo Association of South Africa on Wednesday welcomed the move, but said it had yet to be contacted.

The protracted dispute about the roll-out of EBTs has dragged on for years, with the Association chairman, Lawrence Smith saying that the disputes have mainly been motivated by the casino industry’s desire to prevent the introduction of the terminals, which are already in operation in many other provinces.

The industry had, through a series of negotiations and compromises, including agreeing to significantly reduce the number of bingo licences in the province tried without success to find a solution to the impasse.

The national gambling policy, approved by the cabinet in February, pointed out that the emergence of EBTs had exposed the lack of forward thinking in the current policy, in that it was never considered that there may in future be this type of electronic bingo.

The proposal is that a framework be introduced for regulating EBTs in a coherent and consistent manner, with the solution to the problem being that electronic bingo be allowed, on condition that the number of “licences for bingo, including EBTs, and bingo seats must be limited”.

Meanwhile, The Forum Against Electronic Bingo Terminals, which consists of 26 members – including the ANC Women’s League, The ANC Youth League, The South African National Civic Organisation, Child Welfare and Gamblers Anonymous and representing some 3 million residents in KZN – has expressed its “horror and dismay” at Shabalala’s allegations against the MEC.

“It is the Forum’s opinion that the MEC… is doing everything she can to ensure the interests of the public are being looked after,” said lawyer Stephan Franke, on the Forum’s behalf.

“She has at all times attempted to follow the National Gambling Board policy, which was finally published in April.

“What Mr Shabalala attempts to achieve, by using bully tactics – court battles and misrepresentations in newspaper articles – is to force the Gambling Board and the Office of the Premier to make unconstitutional and reviewable decisions.

The Forum argues that Shabalala is the cause of his company’s own financial predicament, “as it was clear when the bingo licences were awarded, that it was envisaged only traditional (paper) bingo was planned…

“Mr Shabalala cannot argue the losses which he is suffering in his business operation are as a result of the non-roll-out of EBTs and a failure by the (present) Gambling Board to take further action to roll out EBTs.

The Forum alleges some sort of collusion between the bingo industry and members of the former Gambling Board as well as someone in the Premier’s office, Franke says.

Forum members have now called for an urgent meeting with Premier Mchunu, he adds.

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