Online gambling lawyers claim the National Gambling Board (NGB) is exceeding its authority and acting unconstitutionally by declaring current online gambling technology uncertifiable and not compliant with legal standards.
The NGB has issued a formal notice to all provincial licensing authorities, directing them to stop authorising Remote Gambling Servers (RGS) – back-end cloud-based software infrastructure used to support online gambling platforms.
It says this technology falls outside the country’s compulsory technical certification standards.
The board also reiterated that online gambling remains illegal − a position that has previously caused consternation in the industry.
The legalities
The NGB and industry have diverging views of what is lawful, based on differing interpretations of the National Gambling Act.
The NGB argues that online gambling is prohibited, while sports betting is allowed.
Several lawyers have told ITWeb this is incorrect: online gambling is permitted if the operator is licensed by one of the provinces. Provinces, including the Western Cape, Gauteng, KwaZulu-Natal and Mpumalanga, all license online operators.
The Act defines an “interactive game” as one played via an electronic agent over the internet, and Section 11 prohibits such games unless authorised by national legislation, the board states.
NGB acting CEO Lungile Dukwana says the Act “expressly prohibits interactive gambling until a legislative framework to regulate interactive gambling is developed and passed by the president”.
To certify or not to certify
The NGB says its directive to the provinces follows a notice from the National Regulator for Compulsory Specifications clarifying that the relevant standards apply only to wagering and record-keeping systems and not to RGS as standalone systems.
On that basis, RGS cannot be submitted for certification, no new or renewed certifications will be issued, and any previously issued certifications have lapsed or will lapse on expiry, the board says.
The NGB has instructed provinces to stop approving RGS, require operators to use only certified systems, and take enforcement action against those that don’t comply.
“Administrative overreach”
Garron Whitesman, founder of Whitesmans Attorneys, tells ITWeb that national government is putting “pressure on the provinces and industry to centralise control of online betting at a national level contrary to the Constitution,” which constitutes “administrative overreach”.
Wayne Lurie, who specialises in gambling regulatory law, says the NGB’s notice “appears to move beyond clarification of existing law”. He adds that the notice indirectly risks achieving what neither current law nor Parliament have done: prohibiting categories of technology through regulatory instruction rather than legislation.
“In a constitutional system founded on legality, regulators exercise only those powers granted to them by statute. They remain creatures of statute, bound by the limits of their enabling legislation. Policy outcomes, however desirable, cannot substitute for legislative authority,” says Lurie.
In addition, he notes, the absence of certification “does not convert technology into unlawful conduct”.
He adds that remote gambling policy must be clarified, but that this clarity needs to come from Parliament, not administrative expansion. “Interpretation alone cannot provide regulatory certainty without legislative authority.”
Whitesman is sceptical the notice will have much practical effect. “I do not think this latest effort will make any difference to the use of remote gambling server-based games in South Africa. I think that the provincial boards will continue to permit this.”
Dukwana says the NGB will monitor implementation across all provinces and report compliance levels, enforcement outcomes and industry impact to trade, industry and competition minister Parks Tau.
The NGB, in response to the lawyers’ statements, says its notice complies with the Act and was issued as part of its oversight role of the sector in terms of the legislation. In its response to ITWeb, the board also maintains that the law prohibits online gambling.
It also states that there has never been an effort to put pressure on the provinces and industry to centralise control of online betting and it is not trying to take regulatory powers away from the provinces.
* The South African Responsible Gambling Foundation offers free, confidential counselling and treatment for people affected by problem gambling. Contact details for Gamblers Anonymous are here.
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