The Department of Trade and Industry (DTI) is mooting cyber inspectors to control online gambling, should it be legalised in SA on the back of an 18-month-old report.
It says the Department of Communications (DOC) will establish the unit soon, but the plan will need a coordinated approach by the DTI, the DOC, the police and Department of Finance.
The department has been adamant it can effectively regulate online betting, which is currently illegal. However, the regulator - the National Gambling Board - previously admitted it is powerless to stop rogue operators from allowing South African punters to play, because of the virtual nature of the Internet.
In addition, international sites are easily accessible from a local IP address, and some offer players the option to play in South African currency. The Gambling Review Commission recommended in June 2011 that online wagering be made legal, and more than 10 licences issued.
Clamping down
Addressing a recent Parliamentary Portfolio Committee on Trade and International Relations, Macdonald Netshitenzhe, the DTI's chief director of policy and legislation, said it was looking at establishing cyber inspectors. He was responding to queries as to how under 18s would be stopped from gambling online and how the industry could be regulated.
Netshitenzhe claimed it was possible to regulate online gambling, and regulations were required to forestall excesses and involvement of criminal elements. Several entities would have to play a role, such as politicians, ministers, police and the information and communication departments, to curb criminality, said Netshitenzhe. Agencies would be enrolled to check and ensure the enforcement of regulations, he added.
The online gambling regime is not yet regulated, so nothing can yet be prevented, Netshitenzhe said. However, he stressed that online gambling was conducive for trade, if properly controlled.
A ruling, handed down in September 2011, declared online gambling, and advertising of the practice, 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, lost its bid to have its operations declared legal in SA. The site has since ceased operating in SA.
Several solutions
National Gambling Board CEO Baby Tyawa told the committee there were various ways online gambling can be regulated. For example, a casino registered as a .co.za domain could be monitored and its activities curtailed if needed, and this could be made part of registration requirements, she said.
People gambling online would have to verify they are not underage through the payment process, which would preferably be done via a credit card, said Tyawa.
Tyawa said it was impossible to shield SA from the effects of globalisation, including gambling, but she re-emphasised the idea of registering and regulating the activities of the casinos. It would also be important to try to put in place measures that had been effectively implemented in other countries to curtail illegal or undesirable activities, she said.
Bilateral agreements would be reached with sister countries to aid in prosecuting offenders in their own countries, especially with money laundering, added Tyawa. She said SA and neighbouring countries were committed to prosecuting and refunding money illegally obtained by companies in their domain.
Hands tied
However, a year ago, Tyawa told ITWeb the board was powerless to stop international online casinos illegally offering their services to South African punters, because the Internet is virtual and the board does not have international jurisdiction.
The only action the board can take is to write letters to international regulators, and try and catch local punters through its relationship with the South African Reserve Bank and the local banking association, said Tyawa.
Tyawa was responding to ITWeb uncovering that South Africans can easily access international casinos and place bets in rands. A quick check online this morning discovered that several international sites are still easily accessible on a local IP address, a year later.
Impractical
World Wide Worx MD Arthur Goldstuck says while the state recognises that what consenting adults do in their own homes tends to be their own business, there will always be moral objections to providing easier, unmanaged access to gambling.
"Winners don't know when to stop online, as it is so much easier to log on and play and keep playing than to drive to a casino and stay there all night. Which is, of course, what many people already do. However, for gambling addicts who manage to stay away from casinos, legalised online gambling could be disastrous."
Goldstuck says the credit card is a useful mechanism for ensuring gamblers are a legal age, but it does deal with who has control of the credit card. "The law would probably need to include provisions to fine adults who allow children to use their cards for these purposes."
The domain requirement does, to some extent, make sense, as it is possible to act quite quickly against casinos that breach the rules, says Goldstuck. "However, it doesn't take account of the global nature of the Web, nor of the likelihood of gambling apps being downloadable from app stores. You can't impose a domain name on an app, and the law needs to address app-based gambling as well."
Swift Consulting CEO and tech blogger Liron Segev points out that many companies may have a site registered in one country, but hosted elsewhere, and that the casino site could redirect to a different domain, falling outside of SA's jurisdiction. He points out that punters could also make use of someone else's credit card, or use a prepaid credit card.
The adult sector has also previously tried to block underage users from accessing content on phones unsuccessfully, notes Segev. He says the Web owner can only do so much, such as requiring people to tick boxes indicating they are over 18, which can be bypassed.
In addition, notes Segev, people can hide IP addresses and use proxies, and even if the state can find underage punters, this does not protect them in the first place, but is reactive.
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