Tougher Enforcement of South Africa´s Anti Online Poker Laws Planned

South AfricaA recently-introduced amendment to South Africa´s National Gambling Act plans to clamp down on perceived illegal online poker activity by introducing new “procedures for the forfeiture of unlawful winnings”. The amendment, if passed, could lead to tougher anti-gambling penalties also being enforced.

In South Africa, there are several federally-sanctioned avenues for betting online. You can bet on the outcome of horse races and certain sports events online. You can pick your lottery numbers online. Some online bookmakers even offer bets on what lottery numbers will be drawn. Basically there are plenty of luck-based events on which you can bet; but, if you want to exercise your skills at online poker, you´re not supposed to.

The reason you are “not supposed to” play online poker rather than “you can´t” is because the law regarding online poker is extremely confusing. In 2008, the National Gambling Amendment Act creating a framework for online gambling was signed into law without a commencement date. No online poker or online casino licenses were issued and it eventually became clear the country´s Department of Trade and Industry (DTI) had concerns about potential socio-economic harm.

Why Online Poker in South Africa is Perceived as Illegal

Subsequent events have resulted in online poker being perceived as illegal. In 2011, the DTI and National Gambling Board successfully prosecuted the Piggs Peak Casino for offering online casino games despite gaming servers being located in neighbouring Swaziland. In 2015, a Task Force was set up to close down 2,000 illegally-operating online casinos; and, in 2016, an amendment was passed allowing regulators to seize “unlawful winnings” paid into South African financial institutions.

Along with the “unlawful winnings” rule, anybody caught facilitating online gambling (i.e. Internet cafes) or found to be gambling online illegally can face criminal charges resulting in a fine not exceeding 10 million Rand (about $750,000). The only case we can find of the “unlawful winnings” rule being enforced was when a group of South African gamblers were indiscrete with their 1.25 million Rand win (about $95,000) and had their winnings seized by the National Gambling Board.

What´s Changing with the New Amendment?

Much of the new amendment is unrelated to online gambling. The bulk of it concerns stricter regulation of brick-and-mortar casinos, the prohibition of dog racing, and the self-regulation of the horseracing industry. However, there are a couple of lines that will cause concern to online gamblers still playing online poker when they are not supposed to. The key line is [the objectives of the amendment are to] provide for the procedure for the forfeiture of unlawful winnings to the National Gambling Regulator.

What this implies is that more resources will be pumped into tracking payments associated with online gambling. Under the existing law, a list of sites known to operating “illegally” was distributed to South African financial institutions, and the financial institutions had the responsibility to block transactions and report them to the DTI. There is no way of telling how efficient this process has been. It could be the case a blind eye is turned, or that every South African online poker player is now using Bitcoin.

What the Amendment Will Mean to Online Poker Players

The consequence of the new amendment, if passed, will be to drive online poker further underground. Those who don´t invest in cryptocurrencies are more likely to have their winnings confiscated, and players might possibly be charged with conducting a criminal activity – which could affect their livelihoods or future career prospects if the prosecutions are successful. It has been estimated that 250,000 South Africans gamble “illegally” at unlicensed sites – many of which advertise openly.

There is a movement to regulate and tax online gambling similar to how it has been done in the United States on a state-by-state basis (there are nine states in South Africa). However, this will require the rolling back of some of the federal laws which looks unlikely at present. Indeed, with tougher enforcement of South Africa´s anti online poker laws planned, regulated online poker in South Africa looks further away than ever.