Online gambling closer to legalisation - Wednesday 13th of December 2006

Cabinets approval last week of the Draft Gambling Amendment Bill brings legal online and cellphone gambling one step closer.

One interpretation of Pretoria High Court judge Willie Hartzenbergs judgment last month on Internet gambling is that all gambling in SA is illegal until licensed. At present, only terrestrial casinos and bookmaking are licensed.

National Gambling Board CEO Thibedi Majake says his board will license online casinos once the Bill becomes law. Terrestrial casinos are licensed at the provincial level. Majake expects the draft law to pass Parliament early next year. However, he did not say when hearings would start for online or other electronic licences – or when these will be issued.

In the meantime, online gambling, advertising online gambling and providing online gambling services remain a prohibited activity. Hartzenberg gave Casino Enterprises, owner of Piggs Peak, until this Friday to provide grounds for him to rule otherwise, but a reading of his judgment suggests he will be inclined to rule against the gambling company.

Business Day today reports the draft Bill proposes a licensing system for both the players and online gambling sites. The manner in which gambling proceeds will be taxed still has to be determined, trade and industry deputy director-general Astrid Ludin told the newspaper yesterday. She said a key challenge in drafting the proposed legislation is to find a way to effectively regulate the Internet and prevent money-laundering. Another concern is the economic effect of interactive gambling and how to exclude underage and spendthrift gamblers.

Impact unknown

For the present, no one knows what the impact of legalisation will be, partly because the current size of the market is unknown – both in numbers and in revenue.

“We are not certain of the size of the online gambling market, and as there has been no market research conducted in this country, we have no way of estimating,? Piggs Peak spokesman Wendy Graaf said in an interview in October. She was, however, optimistic there will be some growth.

National Gambling Board CEO Thibedi Majake

“We anticipate that regulating the industry will grow the size of the market, but we are not sure how it will impact,? says Graaf.

Peter Collins, executive director of the National Responsible Gambling Programme, says only about 1% of South African gamblers go online because relatively few have access to the Internet. Collins adds that worldwide about 3% of gamblers use the Internet, cellphones, or interactive television.

“We do not expect [e-gambling] to increase simply as a result of legislation which will serve to regulate an activity which is presently available to anyone from sites located all round the world,? Collins says. “Indeed, we support the legislation precisely because it will encourage South Africans to gamble at well-regulated sites which will be required to include various safeguards against excessive gambling.?

Majake says the law provides for only 40 terrestrial casinos. There is no limit set for the online variety.

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