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Online casinos flout SA law

Read time 5min 10sec

Several international online casinos are still offering their services to South Africans despite a ruling towards the end of last year making online gambling from within the country illegal.

ITWeb found several sites that were easily accessible from within the country, and that advertised their offerings to a local audience, while some indicate they accept bets made in local currency.

However, in terms of a ruling handed down in September, online gambling, as well as advertising the practice, is illegal. The Supreme Court of Appeal decision settled once and for all the question of where online gambling takes place.

Swaziland-based Casino Enterprises, operator of Piggs Peak Casino, Piggs Peak Poker, Piggs Peak Bingo and Volcanic Gold Casino, had appealed a North Gauteng High Court ruling that declared online gambling illegal.

The operator lost its bid to have its operations declared legal in SA, in the landmark judgment handed down in the Bloemfontein Supreme Court of Appeals. The site has since ceased operating in SA.

Some sites such as Piggs Peak and African Palace Casino detect when a punter is trying to access the portal from a South African IP address and block them from gambling. The notice displayed by Piggs Peak clearly indicates punters can “only access our gaming software and Web sites from outside the borders of SA”.

African Palace Casino suspended all activity for South African customers from 20 August 2010, which was when the North Gauteng ruling banning gambling was handed down.

The site notes: “We no longer accept registrations, deposits and wagers from players with South African IP addresses.”

Game on?

However, a plethora of gaming portals can be found through a quick search on google.co.za. Limiting the search results to local domains brings up several Web sites that advertise links to international online casinos.

Gambling is a multibillion-rand industry locally; punters waged R215.8 billion in the year to March 2010 and government earned R1.6 billion in taxes from the official sector, according to the latest figures from the National Gambling Board. Globally, online gambling is worth about 7% of the physical industry.

Among the sites offering punters an opportunity to gamble is Silversands.com, which was easily accessible from a local IP address. Its Web site has a currency option, which offers punters the opportunity to play in rands.

Silversands did not respond to a press query around its South African operations and why its site was easily accessible despite the recent ruling. A HelloPeter.com complaint lodged on Friday indicates that at least one punter gambled more than R20 000 during December. Two other complaints were lodged during December.

Another online gambling site, Casino.com, has a dedicated local Web site: Casino.com South Africa. The Gibraltar-licensed casino also offers gamblers the opportunity to transact in rands. It did not respond to ITWeb's queries.

Other Web sites, such as Casino Las Vegas and City Club Casino, are also easily accessible and advertise their online casinos through locally-registered domains. Neither of these sites responded to requests for comment, and ITWeb also unsuccessfully attempted to e-mail Vegas Red for comment.

ITWeb did not test whether it was actually possible to place a bet on these sites, as that would be an infringement of the law.

Risky business

Alicia Gibson, member of AG Consulting and a lawyer specialising in gambling law, says online casinos that are marketing their offerings to the local market and allowing punters to place bids in rands are breaking the law.

Online gambling was set to be legalised 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.

The Department of Trade and Industry subsequently set up the Gambling Review Commission to investigate the entire sector. It recommended that online wagering be made legal, and more than 10 licences issued.

However, the current framework is unlikely to be changed for at least another two years, due to the lengthy processes required.

Gibson says, even if online gambling is legalised, these sites probably will not be able to successfully apply for a licence as the regulators may deem the operators to be unsuitable.

A press release issued by the Department of Trade and Industry, after the Piggs Peak ruling last year, says: “We are resolute that all illegal gambling activities that take away opportunities for the country to generate revenue and subject punters to the risks of gambling without security will be shut down, and all persons and entities found to be offering the RSA public such unlawful activities will be blacklisted and denied opportunities to operate lawfully in the country.”

Currently, says Gibson, there is no provision in the law to stop companies gambling illegally from receiving licences. However, if any of these casinos are convicted in the 10 years leading up to legalisation, they will not be able to apply for a licence.

Although there are no numbers indicating how widespread the illegal practice is, Gibson says there are likely to be quite a few such sites. “It's obviously worth it.”

However, the Gauteng Gambling Board previously warned that punters who gamble illegally face the risk of having their winnings forfeited to the state. In addition, anyone found guilty under the current law faces 10 years behind bars, a R10 million fine, or both.

ITWeb unsuccessfully attempted to get comment sites from the National Gambling Board this morning. However, the body previously said it has several cases in the pipeline, but was waiting for the Piggs Peak appeal decision before moving to prosecute any of the illegal sites.

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