The latest changes to the gambling legislation in South Africa have been heavily criticized by both representatives of the industry and independent experts who deem it extremely restrictive, flawed and nonsensical. Still, the government intends to proceed, with the new bill expected to be passed as law very soon.
The gambling market is growing at an exponential rate across Africa, generating R28 billion ($2.01 billion) in 2017. In comparison, the industry was worth R26 billion ($1.93 billion) the previous year, which indicates a healthy, substantial growth fueled by the booming mobile use and the rise of online casinos. One of the major driving forces behind this success is South Africa where gambling revenues are expected to rise to R30.3 billion in 2019, according to a report by PwC released earlier this year.
South Africa has, indeed, the largest gambling market on the continent but operators fear this could change soon as the government is preparing to tighten up the regulations in this field. Moreover, the new Gambling Amendment Bill, proposed by the Minister of Trade and Industry, Dr.Rob Davies, would introduce severe penalties for both the business and the players themselves. The new legislation has been in the works for over 2 years but was finally tabled earlier this year with the ambitious plans to reduce or even eliminate the negative effects gambling has on South Africans.
Stirring a great number of controversies, the Bill would make players and business much more vulnerable as some of the provisions in it include the confiscation of winnings generated illegally through playing in online casinos, as well as banning dog racing and the betting on it. Should it be passed by the Parliament, the 49-page document would also strip many of the smaller gambling operators of their licenses, leaving only the biggest players in the business.
Although being technically illegal in South Africa, online gambling has become extremely popular in the past few years, with multiple web-based casinos launching with offshore licenses and catering specifically to local players. The government, however, has been clamping down on this unregulated activity, shutting down casinos and seizing money from gamblers. In May last year, the Department of Trade and Industry said the state had confiscated about R1.25 million generated from illegal gambling activities.
With the new Bill, online gamblers would need to limit their activity to betting only, while operators would face huge penalties and revising of their licenses to operate within the country. The future implementation of the bill is surrounded with a lot of “unknowns”, according to experts who believe many of the proposals in it are flawed and unrealistic.
Main Provisions of the 2018 National Gambling Amendment Bill
South Africa’s 2018 National Gambling Amendment Bill includes restrictions regarding online gambling and the existing land-based casinos. Currently, there are around 60 gambling facilities in the country – casinos and horse racing tracks. Betting on dog races, which has been a popular pastime for many South Africans for years, would now be made illegal. Dog races themselves would also be banned, which would immediately lead to increased unemployment rates.
The new bill introduces a wide range of amendments to the National Amendment Act of 2004 although online gambling remains illegal, with the only exception being online betting on sports. Changes in the industry and its regulation are planned and according to the new rules, the main gambling regulator is now the National Gambling Board, while the National Lotteries Commission will oversee and regulate any activity regarding betting on the national and foreign lotteries, and sports pools.
Illegal gambling will be penalized severely – winnings obtained illegally such as from online casino gambling would be confiscated and forfeited. Companies that do not meet the new requirements would be fined or even have their licenses withdrawn. The number of new rules and norms in the industry, however, is enormous – financial institutions are prohibited from processing transactions related to unlicensed gambling activities; gambling venues in public spaces would have to guarantee that their entrances are “separate” or “hidden”. The Bill also bans the installation of ATMs around gambling venues.
Licenses may be suspended or canceled altogether if operators do not meet “broad-based black economic empowerment targets”, which would be set by provincial licensing bodies. In addition, the number of licenses and bingo machines would be limited. There would be restrictions with regards to the advertising allowed for gambling operators, as well as new requirements for the small bookmakers offering secondary lottery and betting products.