Trade, industry and competition minister Parks Tau is reviving an eight-year-old Bill to strengthen the National Gambling Board (NGB).
However, the Internet Service Providers’ Association (ISPA) is pushing back against a provision that would allow the state to block access to foreign gambling websites without a clear legislative framework.
Introduced in 2018 to update a 2004 Act, the National Gambling Amendment Bill has twice lapsed, twice been revived and spent years in mediation before a closed-door committee meeting in the middle of last year seems to have resulted in the publication of an amendment that follows two earlier amendments.
The original 2018 Bill included a provision prohibiting anyone from providing internet services or other technological support to unlicensed gambling operators. This was later replaced with a requirement for the regulator to notify internet service providers (ISPs) to cease business with illegal operators, then removed entirely in mediation, before a version of the notification mechanism was restored in a subsequent amendment.
The 2018 Bill also empowered the proposed National Gambling Regulator to notify ISPs and financial institutions to cease doing business with operators found to be acting illegally.
Billions bleeding offshore
More than R50 billion in gross gambling revenue is diverted offshore each year, with an estimated 16 million South Africans having engaged with illegal platforms in the past year, according to the South African Bookmakers’ Association (SABA).
The authorities battle to shut down illegal sites because each time one is blocked, operators simply change URLs in a game of whack-a-mole. SABA’s research lists 49 unlicensed websites offering online gambling to South Africans, including 1xBet.com, 22BetCasino and 888 Casino.
While the Bill remains in legislative limbo, the NGB has separately requested the Department of Communications and Digital Technologies to implement internet blocking against offshore illegal gambling sites.
However, ISPA says this bid not only presents technical challenges but will undermine the right to access information. ISPA accepts there are some forms of illegal content that access providers may be obligated to block, but it is adamant a well-considered legal framework must be in place that respects constitutional rights and does not hamper ISPs’ ability to service consumers.
“ISPA’s position is that any disruption of internet services to South Africans should be done only as part of a clear legislative framework that balances the right to communicate against the potential harm of problematic content,” says Sasha Booth-Beharilal, ISPA chair.
Technically speaking
The association points to several issues: Domain name blocking is easy to circumvent. IP address blocking can be bypassed by end-users installing a virtual private network (VPN). Packet inspection requires specialised, costly equipment, negatively affects network performance and can still be circumvented using VPNs.
ISPA also argues that internet censorship by its nature involves interfering with fundamental constitutional rights, meaning any blocking should be provided for through a legislative framework, with mandatory public disclosure of blocked websites, and measures that are temporary and subject to regular review.
In addition, ISPA says ISPs must not bear the cost of implementing blocking measures but should be reimbursed for actual expenses incurred.
“Regulators are often quick to conclude that requiring ISPs to disrupt the services they provide to their customers will be a silver bullet to solve their problems. International experiences indicate otherwise,” says Booth-Beharilal.
She adds that while there are limited circumstances where specific content may need to be blocked, such steps often have unintended consequences. “ISPA looks forward to working with policymakers and other stakeholders on the development of a legal framework that respects the rights of South African citizens.”
Moving forward
In the midst of this, Tau says government is advancing the Bill, while the NGB is strengthening enforcement, working with partners like the Financial Intelligence Centre and National Student Financial Aid Scheme “to protect consumers and ensure growth never comes at the expense of our people”.
A recent report from Yazi, an AI-powered survey platform, found widespread signs that gambling causes financial harm among South African online gamblers, with 29% of more than 1 000 respondents reporting they had borrowed money to gamble and 57% saying they had sacrificed essentials such as groceries to fund betting.
Tau, tabling the department’s budget vote recently, added that advancing the Bill will give national government enhanced powers to tackle illegal online gambling, address advertising proliferation and enforce consistent standards across provincial boundaries.
He says a Verified Operators Web Portal has been established – “giving the public a reliable, centralised list of licensed operators across South Africa”.
SABA, while welcoming measures to address illegal gambling, points out that the portal was last updated on 1 March. “It is essential that the database is consistently updated to ensure newly-licensed operators are not disadvantaged by outdated information,” CEO Sean Coleman has said.
The NGB was specifically asked about what information this portal provides and had not responded within a given timeframe.
No consultation yet
Coleman tells ITWeb: “The illegal gambling market presents significant risks to consumers, deprives the fiscus of tax revenue, undermines licensed operators that comply with strict regulatory requirements, and creates an uneven competitive environment.”
Government and the industry have diverging views on what constitutes illegal gambling. The NGB argues that no online gambling is allowed, while sports betting is. Several lawyers have told ITWeb this is incorrect: online gambling is allowed if the operator is licensed by one of the provinces.
SABA adds that it has yet to be consulted on proposed amendments and looks forward to contributing, especially in providing extensive operational, technical and compliance experience.
“Ultimately, protecting consumers and preserving the integrity of South Africa’s regulated gambling market requires both robust enforcement against illegal operators and a modern legislative framework that is developed through transparent consultation with all affected stakeholders,” says Coleman.
* 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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