Gold Circle represents the racing operators and totalisator operators in Kwa Zulu-Natal and Western Cape. and for example conducts the Vodacom Durban July and the J&B Met.
1. Fixed odds bet
The definition in the Bill refers to a fixed odds bet taken by only a bookmaker. In the KwaZulu-Natal Ordinance the relevant Minister from the provincial regulatory body has the power to issue a special authority to conduct fixed odds betting to a person other than a bookmaker. In reality Gold Circle as the totalisator operator holds such Special authority to operate fixed odds. In the circumstances a fixed odds bet should not be limited to a book maker. Existing rights should be respected.
1.2 horse racing authority.
It is assumed that this is intended to be a reference to the body which regulates the non gambling element of horse racing. The Jockey Club of Southern Africa. It is proposed that there should be no reference to any such body as its activities fall outside the ambit of the Bill. For example there is totalisator betting on soccer but the soccer regulator is not mentioned in the Bill.
1.3 gambling machines
In our earlier written representations it was suggested that totalisator be specifically excluded as a gambling machine. In the final draft Bill a "totaIisator machine" has been specifically included. A totalisator is not a machine but a system of betting and it is accordingly not appropriate to include it as a gambling machine (but rather to specifically exclude it).
1.4 open bet.
An open bet should not be allowed to pay out any dividend determined under any totalisator pool principle. whether the pool is conducted by a bookmaker or by any other person. The reason for this is that bookmakers contribute nothing towards the cost of conducting racing or totalisators yet use the product of totalisators in their business in that they employ totalisator payouts as their own payouts.
2.1 The effect of this paragraph is to permit bookmakers to operate a totalisator. This is inconsistent with 'he rest of the Bill which provides for bookmakers to conduct fixed odds betting and open bets (the latter being defined as a bet other than a totalisator bet). By doing so, the Bill undermines the position of the totalisator operator which operates this particular system of betting. In KZN and the Western Cape it is the totalisator operator which holds the race course licenses and conducts horse racing. Betting on horse racing, is a sizeable part of a bookmakers business. The revenue derived from the totalisator enables horse racing to be conducted allowing bookmakers to conduct totalisator type betting would drastically reduce the income of the totalisator operator thereby adversely affecting horse racing. See further comments in 3.1.
2.2 Bookmakers use the totalisator operators information free of any realistic charge and in competition with it. The more bookmakers encroach on totalisator betting, the more the totalisator operators are compelled to encroach on fixed odds betting. The reason is simple; the racing operators need money from the totalisator business to stage horse races, without which there would be no racing or totalisator operators and no bookmakers.
2.3 Bookmakers contribute nothing to the cost' of conducting horse racing. It is their customers who make a contribution by way of a 3% deduction from their winnings.
2.4 Horse racing is under severe pressure owing to competition from other forms of gambling. its proper future funding is essential for its survival. At present, horse racing is funded as to over 90% by the racing operators totalisator income, and as to less than 10% by bookmakers' contributions.
2.5 For the good of horse racing and thus for the benefit of racing operators and of bookmakers and of provincial revenue it is essential that in future the cost of horse racing be borne equitably as between the racing operator (through its totalisator income) on one hand and the bookmakers who benefit from the racing operators work. on the other hand.
2.6 Gold Circle therefore proposes the levying of a tax on bookmakers turnover and that the amount so raised be pad as a contribution towards the cost of conducting horse racing. The rate of that tax would be so set as to balance contributions having regard to the racing operators totalisator turnover and the aggregate of bookmakers turnovers.
2.7 The basis of the sub-section is also wrong in principle. A totalisator system facilitates betting between punters not betting between the totalisator operator and punters. A bookmaker bets with punters himself. The introduction of a bookmaker as a totalisator operator creates a self contradiction.
2.8 The comments made above in relation to the open bet should be read also in relation to this subsection.
3.1 Horse racing relies on the totalisator to fund over 90% of the cost of horse racing and associated activities The totalisator, in turn, depends to a material extent on betting against deposits placed and credit granted.
3.2 The Bill now extends restrictions on the granting of credit to include totalisators. The impact of sub-section 1(b) ('place funds on deposit with the licensee") effectively eliminates telephone betting which is a considerable part of the business of a totalisator operator. Telephone betting provides for persons to open telebet accounts, deposit funds into those accounts and then to be': telephonically using the funds in the account. In some provinces this practice has been in existence for almost thirty years with no known criticism.
3.3 The restriction imposed takes no account of the existing situation insofar as totalisators are concerned (countrywide) and would severely impact upon the business of Gold Circle.
3.4 Furthermore Gold Circle does currently grant credit to certain telebet account holders who qualify for credit through a process of completing a credit application form. Limits are placed on the credit granted. The Bill's restrictions in this regard is contrary to current authorised business practice by totalisator operators and contrary to general commercial practices.
3.5 The provisions would be massively damaging to totalisator operators and would put racing (already under siege from other forms of gambling) in severe jeopardy. The object and effect of the legislation should be to regulate, not destroy the racing industry.
3.6 It is notable that the National Gambling Board itself is not in favour of Sections 13(1) and 13(2).
4.1 No account has been taken of the possible cost implications of moving premises which have already been licensed and approved under existing legislation (17(1)) or costs involved in reaching whatever minimum standards the Minister may by regulation prescribe. (17(5)). The three year moratorium set out in the transitional provision does not alleviate these cost implications.
4.2 No account is taken of a situation where the premises are established before a school or the fact that. in any event, no persons under the age of 18 are permitted on such premises. What if a school opens near a racecourse. which. practically speaking, is impossible to move? The industry cannot be held hostage to where a school might or might not be opened.
4.3 The provisions of sub-section (2) creates an inconvenience without preventing abuse. Whether a punter draws cash within or outside the premises makes little difference to whether a punter will gamble or not.
5.1 The requirement that all persons engaged within the gambling industry be licensed is extremely broad and it is hard to imagine that every person engaged within the gambling industry, which includes the janitor or a gardener, is required to be licensed.
5.2 The Bill should be more specific as to the employees to be licensed.
6. The section implies that there is to be only one provincial licensing authority in each province (with "exclusive jurisdiction"). This is not the case in Kwa Zulu-Natal where there are two regulatory authorities. one for totalisators, bookmakers and horse racing and another for casinos and related gambling activities. This section ignores this distinction.
7.1 In KZN the three turf clubs have juristic personality, having been created by law, The same cannot be said in the Western Cape. where the Western Province Racing Club has not been created under any law. In these circumstances it cannot be the intention of the Sill that an existing licence holder should be at risk by virtue of a requirement that it convert to a juristic person and transfer its licence to that juristic person.
7.2 There needs to be a transitional provision that an entity which holds a licence at the time of the promulgation of the Act shall continue to hold that licence indefinitely. This is vitally important. Existing rights should be respected.
8. Is it intended that a provincial licensing authority may refuse to transfer or renew a licence in the event that these commitments are not met? An existing business should not be placed in jeopardy by the arbitrary imposition of
conditions based upon undefined concepts such as "black economic empowerment" and "combating the incidence and social and economic consequences. of addictive and compulsive gambling."
9 Having particular regard to Section 46(l)(e) this section creates an additional complication. Given the high level of concentration of horse racing in South Africa. and were an application or a transfer of licence to be necessary from the racing clubs to a new company, then there would of necessity be the creation of market power. This would be a further impediment to a proper transition and it cannot be in the contemplation of the Act that it will cause harm through its regulatory process.
10. In KZN, both Durban Turf Club and Pietermaritzburg Turf Club lease premises from the Durban and Pietermaritzburg municipalities, respectively. Rentals in terms of the contractual lease arrangements are mainly derived as a factor of totalisator turnover and whilst this arrangement is acceptable in terms of Section 55(4) as it is an arm's length transaction, the section particularly states that payment to the public body cannot be determined directly or indirectly by reference to the turnover of or profit from gambling activities. It cannot be the intention of the Bill to interfere in existing contractual relationships of this nature.
11 This sub-section provides for a council which will advise on horse racing. There is no suggestion that the persons on the council will have any special knowledge in this regard. Horse racing is a specialised industry which should be regulated by persons with suitable experience and expertise in horse racing at a provincial level.
12.1 The making of regulations for racing always has been and should remain a provincial competency The racing environment differs from province to province and cannot be placed in the same basket as, for example, casinos.
12.2 It is Gold Circle's strongly held view that the effective control of racing and betting on racing should remain with the provinces.
SCHEDULE 1 TRANSITIONAL PROVISIONS SECTION 2(2)
13. The use of the words "subject to the provisions of this Act and applicable provincial legislation" does nor assist an existing licence holder, if an existing licence is not in compliance with the provisions of the Act. This is particularly the case, for example, where a club, not being a juristic person, holds a licence. As a non juristic person it is contrary to the provisions of the Act and therefore cannot remain in force. Provision should be made that no existing right at the time of the promulgation of the Act will be prejudiced by the Act.