Online Gambling Sites in South Africa Could Be Banned

If the Parliament approves a recent government proposal, dog racing and online casinos could be outlawed in South Africa.

South Africa’s gambling industry is at a crossroads. A new bill proposed by the country’s Department of Trade and Industry is currently being debated at the National Gambling Policy Council. National and provincial government representatives are in the process of discussing the new policy, which, if approved, will mean the end of internet gambling in South Africa.

Trade and Industry Minister Rob Davies has been talking about how the state needs to regulate the online gambling market for a long time, but industry representatives didn’t think things would go in this direction.

Along with a full ban on online casino games, local authorities are also considering setting limits on the number of electronic bingo terminals, as well as forbidding dog races.

“Unquantifiable” benefits

The draft is now in the hands of the policy council, and once members discuss, improve and finalize it, the bill will be submitted to the Cabinet for approval. Once the Cabinet gives it the green light, the proposal will be released for public comment.

The draft is still a long way from being fully approved and enacted as the new South African gambling laws, but if it does reach that stage, all hope of having licensed online casinos in the country will be lost.

According to deputy director-general Zodwa Ntuli and chief director MacDonald Netshitenzhe from the Department of Trade and Industry, the proposal is based on the idea that the government has the right to enforce gambling regulations. The two department leaders told MPs that they want to limit the market to those traditional forms of gambling which already exist in the country.

In a meeting with members of the Parliament, Netshitenzhe said the potential benefit of online gambling sites, in terms of job creation, cannot be quantified. As a consequence, the argument that it needs to be legal because it helps reduce unemployment rates does not hold up. Several jurisdictions around the world have chosen to outlaw virtual casinos and betting sites, Netshitenzhe pointed out.

A “very, very bad” decision?

The idea has already received a lot of criticism, both from industry representatives and from a few local politicians. The Democratic Alliance (DA) strongly opposes a ban on online gambling, and would prefer to introduce a regulated market.

Geordin Hill-Lewis, DA spokesman on trade and industry spoke up against the idea: “That is a very, very bad decision. I fiercely disagree with that view. It is completely shortsighted to say that it is better for South Africans not to be allowed to gamble online when there is patently significant demand in the country to do that. It is for government to facilitate that in the safest way possible.”

If authorities ban online gambling, the state will end up spending more resources on enforcing the law, Hill-Lewis argued. On the other hand, the department’s deputy director-general said the policy recognizes that there are a lot of problem gamblers in South Africa and that the level of indebtedness is high.

In addition to banning internet casinos, the authority is also looking to transform the horse racing industry by introducing licenses and to make gambling less accessible, adding that this activity should not be allowed in shopping malls.

New regulations to be discussed

Under the current regulations, the state government is responsible for formulating a national legal framework, but provinces have the competence to issue licenses. This means that gambling is a significant revenue source for them, and they rely on the tax revenues generated by these businesses.

In an attempt to increase local revenue, provinces have handed out licenses for electronic bingo terminals, even though national legislation does not cover this type of gambling. Trade and Industry Minister Rob Davies ordered local authorities to stop issuing any more bingo licenses.

Now the Department of Trade and Industry is planning on coming up with new legislation to cover all forms of gambling in the country. Some of them could be outlawed, others just restricted or limited.

For now, local players can still opt for foreign-based websites, including a number of reliable services which are licensed in other jurisdictions. But the fate of South Africa’s land-based and mobile casino industry will be decided over the next few months.