South Africa to Take Action on Illegal Online Gambling

South AfricaA senior manager from the National Gambling Board has announced the establishment of a task force to tackle illegal online gambling in South Africa.

The laws regarding online gambling in South Africa are complicated. According to the National Gambling Act of 2008, online gambling is permitted, but only with an operator that has been issued with an online gambling license by the Department for Trade and Industry (DTI).

Scared of the competition, brick-and-mortar casinos launched a legal challenge to the Act, which is still waiting to be resolved. Consequently no online casino or online poker licenses have been issued, and the only legal online action that is currently available in South Africa is through a handful of licensed sports books.

The situation is further complicated by the “opinion” of the DTI´s Chief Director of Policy and Legislation – MacDonald Netshitenzhe – who not only believes that gambling is immoral, but who refuses to issue any more online gambling licenses because (in his mind) the negative social consequences far outweigh the benefits.

Online Gambling Alive and Well in South Africa

What Mr Netshitenzhe should be aware of (but doesn´t appear to be) is that online gambling is alive and well in South Africa. His own department has produced figures that suggest if online gambling was properly regulated and controlled, it would generate as much as R110 million each year in tax revenues.

However, rather than supporting regulation, and using the funds generated from taxation to deal with the social consequences of online gambling, Mr Netshitenzhe has been critical of how the gambling sector is policed by the National Gambling Board.

Admittedly, enforcement action against those who engage in unlicensed online gambling has been pretty hit and miss. The DTI and the National Gambling Board won a key court case against the Piggs Peak Casino in 2011; but, other than that, any clampdown against illegal online gambling in South Africa has been at the expense of winning online gamblers, rather than the operators who provide a remote online service.

Task Force to Tackle Illegal Gambling

Now that situation is about to change according to Estelle Jonkheid – a senior manager at the National Gambling Board. Speaking at a seminar in Pretoria to raise awareness about illegal online gambling, Ms Jonkheid announced that a multi-disciplinary task force had been established to address illegal gambling in South Africa.

The task force is comprised of law enforcement agencies, gambling regulators and existing license holders, with the aim of the initiative being to “consider strategies, interventions and actions” against unlicensed operators providing an illegal gambling service to South Africans. Ms Jonkheid suggests that there are as many as 2,000 operators acting illegally in the country.

The initiative was welcomed by Themba Ngobese – the CEO of the Casino Association of South Africa – who said that there was a need for illegal gambling to be controlled because it erodes the revenue of regulated gambling providers. Mr Ngobese added that if attempts to regulate online casinos and online poker were successful, there needs to be a high level of control.

Delegates Speak Out for Expansion of Online Gambling

However, not all of the delegates at the Pretoria seminar were in favour of tougher action against illegal online operators – speaking out instead for the issuing of licenses to “illegal” online gambling operators. Sizwe Snail ka Mtuze of Snail Attorneys was reported as saying it was unfair to allow sports betting while other forms of online gambling were illegal (in our opinion it is also contradictory).

Mr Mtuze´s opinions were shared by Louise Fubbs – Chairwoman on the Government´s Committee on Trade and Industry. Ms Fubbs said that online gambling should be expanded, and the revenues from it used to “beef up” the capacity of law enforcement agencies and the National Gambling Board´s new task force.

Concerns were also raised that legal forms of gambling are dominated by an aging clientele and that brick and mortar casinos will have to embrace technology to reach out to a younger market. There are an estimated 250,000 South Africans playing on unlicensed gambling sites, and it was suggested that the regulation of the market would see many of these choosing to play on licensed sites.

Time will tell just how effective the National Gambling Board´s new task force is and what impact it will have on the supply of online gambling opportunities in South Africa.