South Africa imposes firm new gambling regulations amid backlash

The South African government, through the Legislative arm, has made apparent its intentions to initiate drastic changes in the gambling industry through the National Gambling Amendment Bill, 2018.

Tabled in July this year by Dr. Rob Davies, South Africa’s Minister of Trade and Industry, the Bill, which has been in the making over the last two years, finally looks poised to be implemented-all in a bid to suppress and restrict illegal gambling activities in the nation.

Prior to 1994, South Africa used to have an unequivocal ban on gambling, with the sole exception of horse racing which was preponderantly viewed as a sporting activity; this coming into effect courtesy of the Gambling Act of 1965 that banned all forms of gambling.

The blanket ban was nonetheless done away with in 1994 when the new democratic government, under the stewardship of Nelson Mandela, legalised all forms of gambling.

Two years later, the National Gambling Act then instituted a single national lottery and a structured system of licensed casinos, whilst also recognising horse racing as a gambling activity.

It further advocated for the establishment of the National Gambling Board-an organisation mandated with the responsibility of supervising, monitoring and regulating of the gambling industry. It is as such this change in legislation that emboldened the sprouting of legal casinos, a national lottery and other forms of gambling in South Africa.

The Act of 1996 was subsequently repealed by another National Gambling Act in 2004 which further opened up the gambling laws, but the ultimate game changer in the lucrative industry was triggered by the introduction of the National Gambling Amendment Act in 2008.

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The one front that the country’s licensing regulator has however firmly upheld its limitations is in the licensing of only land-based sportsbooks and casinos in each of the nine provinces in South Africa; making online casinos illegal in the Southern African state despite multiple attempts by several factions to push for their legalisation over the years.

This persuaded South Africa’s munificent betting population to switch to offshore gambling companies, many of which are South African casinos operating with licenses in other countries. It’s safe to say that this did not go down well with the government upon realisation, as none of the income generated was going into the state coffers.

Several nations in Africa have registered exponential economic growth in recent years, with a growing number of Africans, predominantly the youthful population, enjoying an increase in levels of disposable income, and reliable internet access that has been propelled by the smartphone revolution. This has come as a welcome layer to the gambling industry which was estimated to be worth USD 2Billion in 2017, nearly USD 500Million more than in 2016.

Stringent regulations within the Amendment Bill will include the confiscation and forfeiting of winnings obtained illegally through online casinos, while financial institutions will be prohibited from processing any transactions linked with unlicensed gambling activities.

The amendment will also see the transfer of national lottery, foreign lottery, lottery results and sports pools to the National Lotteries Commission as the primary regulator of such bets.

Dog racing and the betting on any form of dog racing will be made illegal, even as the Bill further prohibits the installation of ATMs within any gambling vicinity.

Companies that fail to meet the new requirements will also serve the risk of paying severe fines, or worse off, have their licenses withdrawn.

The new gambling regulations have received a lot of backlash from stakeholders, with many industry and independent experts dubbing it as “restrictive” and “nonsensical”.

South Africa’s new gambling regulations comes only a month after President Uhuru Kenyatta of Kenya approved new tax laws aimed at taming the rising gambling culture in the East African powerhouse.