Gambling board fired, admistrator takes over

By Wiseman Khuzwayo. Time of article published Jun 3, 2012

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Gauteng Economic Development MEC Qedani Mahlangu, has moved fast to replace the Gauteng Gambling Board she fired, with an administrator.

This was after an application by the board to have Mahlangu restrained from firing it was rejected by the South Gauteng High Court on May 8.

The board applied for leave to appeal but this was also rejected. It has now petitioned the Supreme Court of Appeal.

Bally Chuene, an attorney, has been appointed the administrator to fill the void.

The board angered the no-nonsense Mhlangu by refusing to relocate from the leafy suburb of Bramley, in Johannesburg, to the city’s central business district (CBD).

The Gauteng Executive Committee (Exco) took a decision to rationalise the Gauteng provincial state agencies. The agencies that reported to the Department of Economic Development were instructed to move to 124 Main Street, Johannesburg.

But the board ignored the decision. It was duly advised in a letter on October 25, 2011 that it had until December 31 to comply with the decision, but it still did not comply.

The board resisted on the basis that two years before, it had moved from Centurion in Pretoria to Bramley at a cost of R101 million.

It contended that relocating to the CBD would amount to wasteful and fruitless expenditure and was against fiscal discipline, particularly the Public Finance Management Act and other related Treasury regulations. There were various discussions between Mahlangu and the board in an attempt to break the impasse.

Matters came to a head when Mahlangu sent a letter to the board requesting it to give reasons by January 18, 2012 why it should not be dissolved.

In its response, the board tersely and without giving any reasons informed Mahlangu that it would be launching an urgent application, in which the reasons would be provided.

The urgent application was for Mahlangu to be interdicted from unlawfully interfering with the affairs of the board, and that her instructions that the board vacate its premises be declared unconstitutional, unlawful and invalid.

The court found that Mahlangu was entitled to follow and implement the rational decision of Exco by dissolving the board.

The board was fired even before it finished its first year in office, having been appointed in April 2011.

Mahlangu has said gambling plays an important role in the Gauteng economy and contributes a significant amount to the fiscus.

“Gauteng province is the leader in this industry countrywide and we continue to look for ways to improve the industry and further explore downstream linkages and benefits for the rest of the economy,” she said.

In the Gauteng Gambling Board’s annual report for 2011, the chairman, SP Mafojane, said the tax revenue collection had shown an increase of 7.7 percent year on year, increasing from R609.1m to R657.2m.

This will put pressure on Chuene to move fast in order to get the gambling licence issuing back on course, especially for the limited payout machines (LPMs) gaming. The LPM market is concentrated in pubs, taverns and restaurants, and is the most visible alternative to casinos.

But it has been stifled by regulation and the Gauteng Gambling Board had started rapidly rolling out the licences.

The Gauteng licence is considered to be the most lucrative in the LPM gaming industry as the per capita income in the province is the highest in the country.

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