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Call to legalise online gambling in SA

Cherry Red international online Casino.Photo Simphiwe Mbokazi

Cherry Red international online Casino.Photo Simphiwe Mbokazi

Published Mar 12, 2012

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Shanti Aboobaker

ONLINE gambling may soon be legalised in South Africa, following recommendations by the subcommittee on gambling of the portfolio committee on trade and industry last week.

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Online gambling includes internet slot machines, table games such as poker, bingo, and betting against the totalisator. Sports betting is licensable in South Africa.

The subcommittee’s report, which was adopted by the committee, will now go to the National Assembly for debate before moving to the Department of Trade and Industry (dti) for legislative amendments.

In a report requested by the dti, the Gambling Review Commission (GRC) recommended that online gambling be legalised as it would be better able to monitor and regulate the industry if it was legal.

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Legislation from 2007 provided that interactive gambling should be regulated, allowing bookmaking and totalisator licence holders in South Africa to offer their services online, “but that this activity despite being online would not be interactive gambling”, GRC commissioner Adheera Bodasing said.

The subcommittee’s report was a response to the report by the GRC.

The National Gambling Board (NGB), the industry regulator, is powerless to stop international online casinos from offering their services to South African punters as the internet is virtual and the board does not have any international jurisdiction.

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All the board can do is write letters to international regulators and catch local punters by establishing their relationship with the help of the Reserve Bank and local banks.

The NGB has developed a relationship with the central bank and the Banking Association of SA, which identify transactions between online betting sites and banking customers, seizing their illegal winnings and transferring them into an online gambling trust fund. It has accumulated R3.5m over the past three to four years.

NGB chief executive Baby Tyawa said the expansion of online gambling locally was predicated on two factors: the number of people who had access to the internet, and the number of people with cellular handsets, which was increasing exponentially.

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“Ninety-eight percent of the (South African) population has handsets – and this will increase the number of gambling games.

“(We felt) it was critical that the existing games have sufficient law enforcement,” Tyawa told Business Report.

She stated emphatically that online gambling remained illegal in South Africa until new legislation came into effect.

“Our position is that online gambling is illegal. We will report (incidents) to law enforcement, and the (National Gambling) Act allows a maximum penalty of R10 million if you’re found to be actively involved in online gambling,” she said.

The NGB does not have composite figures on the local online gambling industry.

“We don’t know the extent of the industry, but there is a (overseas) site we’re monitoring. There are no servers in South Africa that we know of, but the Gauteng Gambling Board reported 48 online gambling cafes to the NGB last year,” Tyawa said.

The board has reported this to the police, but investigations were constantly thwarted by online gambling rackets moving locations, she said. “They (the cafes) keep moving from place to place,” she said.

The GRC was established in December 2009 and completed its mandate in August 2010, when it presented its report to the dti, which tabled it in August 2011.

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