Comments to Parliament on National Gambling Amendment Bill






1.         The purpose of this memorandum is to provide comments by the Gauteng Gambling Board, in respect of the National Gambling Amendment Bill as      introduced in the National Portfolio Committee on Trade and Industry.


2.         The comments are divided into two broad categories namely, general comments     dealing with broad principles and technical comments on specific provisions.


General Comments


3.         The structure of the current National Gambling Act is premised on certain   fundamental principles.  National Gambling Board is primarily responsible for the       development of National Norms and Standards and a limited oversight function        over the activities of the Provincial Licensing Authorities.  The radical alteration of           the role of the National Gambling Board from a norm setter to a licensing           authority has a serious impact on the current structure of the legislation namely: -


3.1        The Bill does not fit into the scheme of the current law and creates            inconsistencies.  Currently the National Gambling Board has been entrusted with             the power to review the issuing and revocation of National licences in terms of             sections 42 and 43.  Inconsistency and ambiguity is created by granting the           National Gambling Board the power to issue interactive gambling licences.  The Bill if passed in the current form will result in the National Gambling Board reviewing the issuing and revocation of National licences issued by the Provincial            Licensing Authorities while National licences issued by it, will not be subjected a        review   regime provided for the in the Act.


3.2        The Provincial Licensing Authorities are best equipped to perform this function        due to the wealth of experience and capacity they have.  The National Gambling         Board has neither the capacity nor the experience to perform this function.


4.         The Bill has omitted critical provisions.  These provisions include application and     licence fees, number of licencees to be issued, application procedures,           advertisement, public hearing, penalties for late payment of fees and provisions             relating to taxation.  It is imperative that matters of this magnitude are addressed    in the Bill.  It is arguable that if these matters are intended to be dealt with by the         Minister by way of regulation, this may give rise to the risk of unconstitutional             exercise of powers.  The constitutional obligation on a legislature to respect,          promote, protect and fulfill the rights entrenched in the Bill of Rights implies that          where a wide discretion is conferred upon a functionary, guidance should be             provided in the law as to circumstances, conditions or manner in which those         powers are to be exercised otherwise it should be regarded as unfair.

            (See for example Dawood, Shabali and Thomas v Minister of Home Affairs 2000(3) SA 936 CC; Janse van Rensburg NO v Minister of Trade and Industry 2001 (1) SA 29 CC.)  From these cases it seems clear that mere procedures would not suffice, as proper procedures prescribed by the Promotion of Administrative Justice Act must in any case be followed.  What the Court has in mind is that the legislature should provide the executive with clear guidelines for the exercise of the discretion.  Depending on the power to be exercised, such guidelines may have to set out the circumstances or conditions that must exist before the discretion may be exercised, or the manner in which it is to be exercised.


5.         World Trade Agreement

Once Parliament approves the licensing of interactive gambling, it would be difficult if not impossible to protect the local gambling industry by not offending the World Trade Agreement which South Africa is a signatory to.  If overseas suppliers of gambling and betting offer better gambling products than their South African counterparts which results in the outflow of cash and impacting negatively on the local industry like job creation, South Africa will not be in a position to introduce measures to protect local industry as these will be deemed to be negating the World Trade Agreement by restricting the cross-border supply of gambling and betting services.  In this regard your attention is drawn to the WTO rulings such as the decision of the panel of Appeal of World Trade Organisation in the matter between the United States and Antigua and Barbuda.


6.         A number of amendments that are required and which have previously been agreed to between the regulators and the Department of Trade and Industry, have not been included in these amendments.  For example the current National Gambling Act does not provide the process for the application to acquire a financial interest in the holder of a national licence and the comprehensive provisions relating to the regulation, control and licensing of the National Horse Racing Authority.  It might be prudent to save the state unnecessary costs associated with the law making process by incorporating these amendments into the current Bill. 


7.         Comments on specific clauses.


7.1        Ad Amendment of Section 1.

            (a)        “gambling device:”

                        This definition is limited to the devices that determine the results of the      game.  Gambling is a transaction consisting of the various elements,          namely input, processing and output.  All these elements of the     transaction are critical from a regulatory point of view, for example, the            type of the game the player chooses to participate in and the amount of          the bet both of which form part of the input element are linked to a player    protection or public interest and should fall within the regulatory purview.         The current definition merely confines itself to devices linked to the        second element of processing.   It is therefore suggested that this             definition be extended to cover all the elements.


            (b)        “interactive gambling licence“

                        In terms of the current scheme of the legislation, a distinction is drawn       between the various types of licences namely, separate licences exists in         respect of an operator, manufacturer or supplier of software and     employment.              The definition conflates these concepts.  It is        suggested that this clause be redrafted to separate these concepts.


            (c)        “manufacturer, supplier or maintenance provider”

                        It is recommended that the definition be extended to cover the       manufacturer or supplier of interactive equipment and software in line with          the current legislative scheme.


7.2        Ad substitution of section 2


            The Bill is promulgated in the public interest.  This means that interactive gambling players are protected from unlicensed and unscrupulous operators who may, offer interactive games which are not fair and may not honour the players winning.  Accordingly the regulation of interactive gambling should include the elimination of unlicensed operators.  It is recommended that the application of the Act should be extended to gambling in general (licensed or unlicensed) excluding the lottery.


7.3        Ad clause 4 (purpose of this Act)


            In view of the comments above it is recommend that the word “licensed” in paragraph (a) be deleted.



7.4        Ad clause 8 (insertion of section 5A)


            It is suggested that this clause be moved to section 1 as it is a definition of an interactive transaction.


7.5        Section 8


            It is recommended that this clause be extended to cover unlicensed interactive games.




7.5        Ad clause 19 and 20 (Jurisdiction of the Board and responsibilities)


            If Parliament accepts to leave the regulation and control of gambling to the Provincial Licensing Authorities, a consequential amendment will have to be effected to this clause.


7.6        Ad clause 21 (amendment of section 35)


            This is another example of the amendment which does not fit into the current legislative framework and which creates inconsistencies.  The Board does not have the power to issue provincial licences.