Two years after the Gambling Review Commission recommended online gambling be legalised as a matter of urgency, committee members still have to accept the report and it will be at least two years before legislation is enacted.
The National Council of Provinces (NCOP) committee on Trade and International Relations met recently to debate the review commission's report, which was published at the end of June 2011. Interactive gambling is illegal as there is currently no provision in regulations for licences to be issued.
The review found this is a "grey" area that must be addressed urgently before the state faces legal action from punters who have been duped into playing, and then lost their winnings.
The NCOP committee was ready to accept the report in its final version, paving the way for the regulatory process to begin, when some members indicated they were not happy with the final version. As a result, it is set to be adopted when the committee next meets, in the next few months, unless changes are proposed.
Physical gambling was legalised in SA in 1996 and has since skyrocketed into a multibillion-rand industry, with turnover doubling between 2001 and 2009. In the year to March 2012 - the latest available - punters wagered R257.6 billion, the bulk of which was at casinos.
Stripping out winnings, the gambling sector made R18 billion in the 2012 year, and the state collected R1.8 billion in tax. Online gambling has the potential to add R120 million to the fiscus every year, as international figures show Internet-based gaming accounts for about 7% of the bricks-and-mortar industry.
Still illegal
The review commissioned recommended that more than 10 licences be issued to online operations. Online gambling was set to be allowed after legislation was passed by Parliament in 2007.
However, no licences were ever issued and the regulations, published for comment in 2009, were not supported by Parliament's Trade and Industry Portfolio Committee. As a result, interactive gambling is illegal.
This position was affirmed in court cases, initially in the North Gauteng High Court, and then the Supreme Court of Appeal, both of which found online gambling takes place where the punter is, and not where the server is located.
The case was based on an application by Swaziland-based Casino Enterprises, operator of the popular Pigg's Peak Internet Casino, which wanted to overturn the Gauteng Gambling Board's decision that it could not advertise within SA's borders.
During the committee meeting, members expressed concern as to how social responsibility would be enforced, and that the report contained issues that needed to be corrected. Chairman Dumisani Gamede said the report was adopted, subject to the receipt of proposals on changes that needed to be effected on the report from members. If no proposals were received, the report would be adopted as it stood.
Lengthy process
After the report is adopted, the Department of Trade and Industry will consolidate input from the National Assembly committee and the NCOP, and then a policy needs to be drawn up, which would then lead to legislative changes.
Nicholas Hall, an attorney with Michalsons Attorneys, explains there has been little movement and it will be a few months before the report is adopted. He says it could take two years before the legislative process is sorted out, but that is an optimistic timeframe.
"The wheels of Parliament turn very slowly... You just know it's going to take time."
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