As the ANC comes under fire for reportedly considering an internet ban to prevent online gambling, and the National Gambling Amendment Act 2018 is stripped to a bare minimum, local gaming lawyer, Garron Whitesman, argues that next year’s general election may well prove crucial to the South African online market.
With the South African Portfolio Committee on Trade and Industry approving the National Gambling Amendment Act 2018 in late November, operators had hoped that the continent’s largest gambling market may finally be set for modernisation.
However, with the bill reduced to just three technical matters in order to rapidly push through a mandate that purely addresses “existing governance challenges,” both operators and punters face further delay in welcoming an effectively regulated industry.
“I do not foresee much changing for the next year but there will be a lot of work behind the scenes to create and facilitate change,” said Garron Whitesman, founding partner of Whitesmans Attorneys.
“The streamlined Amendment Act only deals with three aspects, none of which directly impact on the opening of the market. The Amendment Act still needs to be approved by the National Council of Provinces and I expect that there will be meaningful opposition to the same in the NCOP. It is certainly not a slam dunk for the National Government.”
The approved bill intends to transfer regulatory authority from the National Gambling Board to a newly founded National Gambling Regulator, clarify National Gambling Policy Council governance, and widen the National Central Electronic Monitoring System to improve the collection of tax data.
Though South Africa currently permits online sports and race betting, online gambling is still prohibited, despite the Gambling Board of Gauteng – a province which generates 42 percent of the country’s GGR – recently criticising the government’s “lack of capacity and appropriate skills” in levying the online restrictions.
The passing of the act will now delay the discussion of effective regulation further, with the Portfolio Committee on Trade and Industry stating the timeframe for discussion was too short to properly assess the technical realities of horse and dog racing, online gambling, betting on lottery results and electronic bingo terminals.
Despite frustrating a much-anticipated modernisation opportunity, Whitesman observed that the extended period for consideration could actually prove beneficial for the industry.
“The balance of the main bill does also not deal directly with opening the market; however, some members of the Portfolio Committee seem to think that this is a good opportunity, I am of the same view.”
“We have general elections coming up and are unlikely to see the current Minister for Trade and industry staying on in his current role. This could have a positive effect on the opening of the market – I do believe online bookmaking will continue to grow at a steady rate.”
However, though the approved gambling act does not necessarily inhibit long-term forward progress, operators are concerned that it could immediately facilitate significant regressive momentum.
In early December Ghaleb Cachalia, the Democratic Alliance party’s Shadow Deputy Minister of Trade and Industry, warned that amendments made by the ruling ANC party to the existing National Gambling Act could endanger Section 54, which ensures the country’s industry is “not closed off to competition, but subject to normal market conditions.”
The caution referenced a comment by DTI Minister Rob Davies in 2016, threatening punters who patronised internationally licensed sites by stating “we may not be able to stop you when you play the game, but when you win, we get you.”
The ANC also faced criticism when the former chief director of the DTI’s Consumer and Corporate Regulation Division, MacDonald Netshitenzhe, reportedly advised his party that it could “can stop online gaming by banning the internet.”
“I don’t believe that the ANC has any plans to ban the internet given that South Africa is a constitutional democracy,” observed Whitesman. “I am also not convinced that the ANC are anti-gambling per se, but I believe that Minister Davies is and that the DTI policy has been informed by this position.”
Whether a change of party at the general election could provide a more receptive backing of online regulation remains to be seen, with Whitesman observing the ANC position mainly concerns “the socio-economic impact on the poor, given South Africa’s massive wealth gap.”
“I am of the view that the position is likely to change, but it will require the Government to take proper heed and account of the submissions made by industry stakeholders over the past few years that this concern can largely be ameliorated.