South Africa Introduces Amendment Bill Designed to Strengthen Gambling Laws

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Tuesday, July 24th, 2018 | Written by Lucy Brown

Last Friday, South Africa’s Department of Trade and Industry (DTI) released a draft of a bill designed to significantly restrict the country’s regulated and unregulated gambling markets. The National Gambling Amendment Bill was originally drafted in 2016, and has since passed through several iterations before the DTI announced its intention to introduce the latest version into parliament later this year.

In addition to not allowing any new forms of gambling in the country, the bill also takes aims at anyone attempting to access those online products not already available in South Africa through locally licensed websites, which are basically restricted to just sports betting. The bill also contains an explicit warning to financial institution that they “must not process payment transactions for any gambling activities that are not licensed.”

New Regulatory Bodies

A copy of the National Gambling Amendment Bill has been released on the DTI website, with one of the main proposals on the 49-page document being that the National Gambling Board should be replaced by a new regulatory body called the National Gambling Regulator (NGR), which will then be responsible for overseeing South Africa’s gambling industry.

The bill also proposes banning dog racing and wagering on such events in South Africa, while the country’s horse racing industry will be allowed to establish an independent “self-regulating body” whose activities will be monitored and overseen by the NGR. According to the legislation, a “reasonable amount” of the industry’s wagering revenue will subsequently be used in the “development of the horse racing industry and usage of products belonging to totalizator operators.”

In addition, a newly created National Lotteries Commission (NLC) will be given responsibility for regulating and monitoring all lottery games, as well as sports pools products. A maximum limit on the number of licenses will then be set on lottery and sports pools.

Land-Based Casino Reforms

South Africa‘s licensed brick-and-mortar casino operations will also be subjected to stricter measures if the National Gambling Amendment Bill survives in its present form. This includes placing restrictions on the location of automated teller machines in or around those gambling premises situated inside public places, such as shopping complexes, and arcades. Furthermore, a maximum limit on the amount of bingo licenses issued by local regulators will be set, while electronic bingo machines, too, will be reduced in numbers.

Other reforms include imposing restrictions on the advertising or promotion of gambling products. In addition, the NGR will be authorized to forfeit any unlawful winnings obtained by South African gamblers, while the regulatory body will keep a “register of unlawful gambling operators,” with any operator contravening the country’s laws subsequently prohibited from applying for a gambling license for five years after their listing.

Online Gambling

While South Africa permits legal online sports betting, the same cannot be said for online casino games and poker which continue to be illegal under South Africa’s current gambling laws cited in Chapter 2, Part B of the National Gambling Act 7 of 2004. Up until now, however, players flaunting the law had have little to worry about as the government has refrained from pursuing legal action against any individuals.

Meanwhile, the widespread use of smartphones has been a main factor behind the impressive growth experienced by the country’s gambling market, with PricewaterhouseCoopers (PwC) consultants forecasting a grow rate of 24% for the whole of this year. As Jason Foster, head of iGaming at Chalkline Sports, explains:

“Driving forces include increased smartphone penetration, improved awareness of sportsbook brands, increased mobile data availability and the ability to conveniently transact from a smartphone.”

This has made it easy for unlicensed firms to target South African players, resulting in numerous operators offering their gambling products from outside of the country, including those holding iGambling licenses from reputable jurisdictions such as Malta, Gibraltar, and Guernsey. As mentioned, operators, players or financial firms attempting to process online gambling transactions will be targeted under the new law.

Black Economic Empowerment

In 1948, the National Party imposed apartheid in South Africa, until discriminatory laws began to be repealed in 1990. A racially selective program called Black Economic Empowerment (BEE) was then introduced in 2004 in an attempt to “ensure broader and meaningful participation in the economy by black people.” The gambling industry is no exception, with the amendments also setting licensing targets in order to satisfy the Act.