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Johannesburg - Government plans to oppose a bill seeking to legalise online gambling in South Africa.
On Friday, the Department of Trade and Industry (dti) and the National Gambling Board (NGB) issued a joint-statement reacting to media reports about the Democratic Alliance (DA) gazetting ‘The Remote Gambling Bill’.
The proposed bill - which has been submitted to Parliament by DA shadow minister of trade and industry Geordin Hill-Lewis - seeks to legalise online gambling in SA. The bill is expected to be tabled after Parliament reopens in February.
But the dti and the NGB have reiterated that online gambling is illegal in South Africa. The department said it further plans to oppose the bill to legalise online gambling in South Africa.
Moreover, online gambling operators and participants in South Africa risk facing R10m fines, ten year jail sentences or both, according to the dti.
“Online gambling, or what others refer to as remote gambling, is not allowed in South Africa, and the National Gambling Board together with other law enforcement agencies will act on this illegal activity with immediate effect,” said the dti.
“Online gambling is not desirable and the dti has raised its objection to the proposal by the Democratic Alliance to legalise online gambling,” added the dti.
The dti went on to say that “there are a number of social ills associated with gambling, especially online gambling which occurs in unregulated and unsupervised locations”.
“Other forms of gambling that are allowed in South Africa take place under strict supervision in locations that are designated for such activities. Online gambling is not desirable and the dti has raised its objection to the proposal by the Democratic Alliance to legalise online gambling,” read the statement.
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DA shadow minister responds
The DA shadow minister of trade and industry Geordin Hill-Lewis told Fin24 that he disagrees with the dti’s “assessment of online gambling”.
Hill-Lewis told Fin24 that online gambling is happening in South Africa, regardless of its illegality. The DA has argued then that it would be better to legalise online gambling so that it can be regulated locally, generate tax revenue and boost job creation.
"If they want to gamble, they will do so and it's far better to allow them to do so in a safe and regulated environment where government auditors and regulators can check operators, can hold them to high standards; top international standards where problem gamblers can be protected by the latest cutting-edge problem gambling software,” Hill-Lewis told Fin24.
"It's entirely possible and most other jurisdictions around the world have designed regulation that allows online gambling to take place safely and in such a way that it protects minors and vulnerable people and is able to properly regulate it. So, that is our preferred approach,” Hill-Lewis added.
Among proposals that the DA's Hill-Lewis has put forward include ensuring that online gambling companies open local offices and call centres if they want to play in the South African space. The bill also seeks that provinces and the National Gambling Board licence these operators.
It is unclear how much tax revenue online gambling could generate for South Africa. But the casinos in South Africa generated R16.4bn in 2012 while levies and taxes on all types of legal gambling - which includes the likes of horse racing - generated R2.1bn in 2012, according to PricewaterhouseCoopers (PwC) research.
However, Hill-Lewis told Fin24 that he agrees that gambling can have a negative social impact.
"I agree that gambling can impact negatively on their social well-being but so can drinking. If there's a demand for something, it's not up to the government to tell people what they should do with their free time,” he said.
"If I could give people advice, I would say please don't gamble. Don't waste your money; the house is always going to win, you're always going to lose your money in the end. But if they want to gamble they should be able to do that safely; they should be able to do that in an environment in which their interests are protected; their legal rights are protected in a legal regulatory framework.
“At the moment, I think they are worse off because they have absolutely no legal protection in South Africa if they gamble and they're taken for a ride by a someone doing some kind of online gambling scam; they've got no legal protection whatsoever,” Hill-Lewis said.
NGB’s online gambling concerns
The National Gaming Board (NGB) has expressed concerns about online gambling.
Shaheed Manuel, who is a Stakeholder Manager for the NGB, told Fin24 that online gambling is a “very difficult sphere to regulate”.
"There are definite concerns with regard to operators making available these forms of gambling in a very unregulated way,” Manuel told Fin24.
"We are busy at the moment looking at various impacts of this illegal gambling,” he said.
He added that South Africa has a “very well formalised and regulated gambling industry in the country which we believe supports our economic growth path”.
"The key here is to make sure our citizens are both protected and benefit from gambling,” he said.
Manuel also went on to list three other concerns around online gambling.
The first is that the NGB questions how many jobs online gambling companies could create in South Africa.
"It is insignificant to that which we have been able to achieve with our legal operators,” Manuel told Fin24.
Secondly, Manuel said online gambling companies can operate from anywhere in the world and that even if they have a local office or call centre in South Africa, this is “minimal in comparison with what we've been able to achieve with our legal operations".
Thirdly, Manuel said that social considerations at stake and that strict regulation is required so that gambling is not harmful to society.
Fin24 tried to contact the dti for comment on the matter but the ministry was unreachable at the time of writing.
