Online Gambling Bill Slated in South African Parliament

Proposed legislation on online gambling has been met with a groundswell of opposition, with calls for the bill to be sent back to the drawing board because the government has not thought it through fully.

Outright opposition to the National Gambling Amendment Bill, or concern about its flawed nature, were the overwhelming responses by those making submissions during a parliamentary public hearing yesterday.

The bill is intended to decriminalise and regulate interactive, or online, gambling. Casino Association of SA (Casa) chairman Jabu Mabuza told the trade and industry committee there had been insufficient consultation on the "woefully insufficiently researched" bill, which was being pushed hastily through Parliament.

Concern was expressed about the proposal to limit the number of interactive gaming operators. This could exclude operators from other countries and so contravene international treaties, the committee was told.

Submissions to the committee were also made by the Financial Intelligence Centre (FIC), which was concerned that interactive gambling could facilitate money laundering. Casa argued that the bill needed more work as it did not provide for the taxation of online gambling.

The Congress of South African Trade Unions (Cosatu) criticised the negative consequences gambling had on the poor. The FIC proposed improvements to the bill it believed would close loopholes left open for money laundering. The bill, it said, should include licensing and probity checks of operators. The regulator should also be empowered to block unlicensed interactive casinos from carrying on business in SA and block the flow of funds to them. The FIC also warned that the cost of regulation of the interactive gaming industry was likely to be "substantial" because of its cross-border nature. Dealing with jurisdiction, the FIC recommended that licensed operators should be required to subject themselves to domestic laws.

Mabuza highlighted a lack of tax proposals. "Whatever happens in the industry turns on the level of taxation, which has to be fair and equitable," Mabuza said. "There has to be a level playing field."

To ensure consistency and fairness, interactive operators ought to pay a rate of tax no less than that paid by other sectors of the gambling industry.

Another concern was that interactive gambling operators should be subject to the same stringent requirements as other operators, for example, on black economic empowerment, probity and prohibitions on underage gambling.

The association said unless online gambling was dealt with on the same terms as other forms of gambling it should be dealt with under another law instead of its provisions being incorporated into the National Gambling Act. Cosatu called for the bill to be rejected as it was opposed to the expansion of legalised gambling.

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