The North West Gambling Board is under fire from the South African Bookmakers’ Association (SABA) over whether it had the legal power to license betting exchanges as bookmakers in the first place.
The gambling board issues betting exchange licences under the category of bookmaker − a classification SABA is challenging because betting exchanges match punters with each other, rather than taking the bets themselves.
SABA argues this is important because a conventional bookmaker accepts the betting risk itself. On an exchange, one punter backs an outcome and another lays it, while the exchange matches the two and earns a commission.
The association’s key issue is whether the operator of a peer-to-peer exchange is operating as a bookmaker as defined in law and, if not, why it has been issued with a bookmaker licence.
Chapter and verse
The National Gambling Act defines a bookmaker as “a person who directly or indirectly lays fixed-odds bets or open bets with members of the public or other bookmakers, or takes such bets with other bookmakers”. It doesn’t mention bet exchanges.
That betting occurs on a betting exchange does not mean that the exchange operator is legally conducting bookmaking, says SABA. “What the betting exchange is effectively doing, is granting a basis and platform for unlicensed members of the public to unlawfully act as bookmakers,” says SABA CEO Sean Coleman.
SABA is tackling the North West Gambling Board over whether it has the legal authority to issue a “Bookmaker (Bet Exchange)” licence. “The power to issue a licence for any specific activity must be found in legislation,” says Coleman.
“The fact that a licence may exist says nothing about whether the regulator had the legal authority to issue it. In South African law, bodies created by the legislature may exercise only those powers granted to them by that legislature,” notes Coleman.
The association argues that the board cannot create powers for itself through its rules, licence conditions or decisions if those powers are not provided for in law.
Powers tested
The North West Gambling Board’s licensing powers have previously been tested in court. In 2022, Peermont Global took on the North West Gambling Tribunal and bingo companies over bingo licences that had been granted.
During the matter, the Supreme Court of Appeal (SCA) dealt with whether provisions in the board’s notice inviting companies to apply for licences to operate bingo businesses at specified sites went beyond the powers it had under the North West Gambling Act.
The court found that parts of the request appeared to go further than the Act allowed. However, Peermont had not specifically challenged the legality of the request itself, so it remained in force and had to be applied.
The Peermont case also states that anyone who wants to apply for a gambling licence may only do so if the board has published a notice in a Provincial Gazette inviting applications for a specific type of gambling licence.
The SCA says: “The board would invite applications for a specific gambling licence only after it had determined the need for a specific gambling licence in the province.”
The principle that an administrative decision cannot simply be disregarded because it may be unlawful was established by the SCA in Oudekraal Estates v City of Cape Town and later affirmed by the Constitutional Court in MEC for Health, Eastern Cape v Kirland Investments.
Such a decision continues to have legal consequences unless it is successfully challenged and set aside, the judges found.
Paper chase
According to National Gambling Board figures, sourced from provincial licensing authorities, 11 bookmaker licences were issued in the North West in 2024/25, up from five in 2022/23. However, these official figures do not separately identify any as betting exchange licences.
Overall, across all nine provincial gambling bodies, 402 bookmaker licences had been issued as at the 2024/25 financial year, according to National Gambling Board figures.
As part of its bid to challenge the gambling body’s powers, SABA has requested records, legal opinions, evaluations and statutory basis that the North West Gambling Board relied on when introducing its betting exchange licensing framework.
SABA’s request follows an earlier clash with exchange operator Betmatch over whether betting exchanges are authorised under existing gambling legislation.
“Those records should identify precisely which legislative provisions authorised the licensing of a peer-to-peer betting exchange under a bookmaker licence. Until that legal basis is identified, the question remains unanswered,” says Coleman.
* The North West Gambling Board was provided with an opportunity to respond to SABA’s statement but had not done so by deadline.
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