Online gambling is still illegal in SA, and is set to remain that way until a commission has wrapped up its findings to present to Parliament.
In addition, there is no clarity as to what happens if South Africans win money offshore, and try to bring their winnings back into the country. The local gambling industry is worth about R212 billion, but the size of the online industry is difficult to quantify.
Nomfundo Maseti, the Department of Trade and Industry's chief director of policy and legislation, says “online gambling is not allowed in SA at the moment”. She explains that there are no regulations in place to regulate the industry.
Maseti says South African gambling online are doing so illegally and could forfeit their winnings. “It's a risk that they take... you've engaged in an illegal activity.”
Outlawed
However, the department does not have any information on how much is being won illegally in SA. ITWeb understands there are about 500 000 online gamblers in the country.
The Gauteng Gambling Board says Internet operators that offer online gambling to South African residents are operating illegally. Punters can be punished with a R10 million fine or 10 years in jail, based on a 2006 court ruling, it says on its Web site.
While online - or interactive - gambling was set to be legislated by the National Gambling Amendment Bill, this law has not yet been signed into law by president Jacob Zuma. The Bill was drawn up as part of government's plans to tighten regulations on interactive gambling and reduce offshore control.
However, last August, the Parliamentary Portfolio Committee on Trade and Industry requested that the implementation of the regulations on interactive gambling be delayed so that the legislation could be reviewed. The department is now reviewing the entire industry.
Could happen
Online gambling could still become legal in SA, but that would depend on a report by the Gambling Review Commission, which is reviewing all aspects of gambling, explains Maseti.
She says the commission aims to wrap up an initial report by mid-year, and present it to trade and industry minister Rob Davies, who will then take it to both houses of Parliament for consideration.
Online gambling is potentially a big revenue-spinner, and the department has already had several applications for online gambling licences, notes Maseti. “They can't wait forever.”
Obstacles
There are several aspects that need to be taken into account. Among these is how to limit online gambling to adults, and concerns that gambling could be associated with criminal acts, like money laundering.
Maseti says the department also needs to look at how an online gambling industry would affect the current industry, and whether there would be any erosion of market share, for example.
In addition, the Financial Intelligence Centre Act, which requires individuals to disclose their personal details, like their ID number and proof of residential address, would also be applicable to players taking part in interactive gambling.
Maseti adds that players would have to create an account limited to a credit card or cheque account, and present a bank stamp to confirm the validity of the respective account. No cash transactions would be allowed and players could have up to R20 000 in their accounts.
If government decides in favour of online gambling, the National Gambling Board would only issue 10 licences. Gambling operators would be required to prove they have a physical presence in SA and their financial transactions would have to be located within South African borders.
Steven Ambrose, MD of World Wide Worx Strategy, says “the Internet is breaking down barriers and creating issues for regulators”, because of the multinational nature of the Internet and the players.
He adds that “in the absence of clarity, everyone is doing what they want”.
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