National Gambling Board’s Research Project on Socio-Economic Impact of Gambling; Department’s Legislative Programme

This premium content has been made freely available

Trade and Industry

22 August 2001
Share this page:

Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

22 August 2001

Chairperson: Dr Rob Davies

Documents handed out
Department of Trade & Industry Legislative Programme 2001 (Appendix 1)
National Gambling Board Research Brief: The Socio-Economic Impact of Gambling in South Africa (Appendix 2)
The Department of Trade and Industry went through its legislative programme for 2001. The National Gambling Board outlined its research project on the socio-economic impact of gambling in South Africa. A fundamental issue that arose was a concern by some of the committee members whether this industry contributed to national and economic development at all. Others merely regarded it as a vice that does not contribute to economic development, but as a disproportionate tax on the poor since it is the poor that are more likely to be found gambling.

Department of Trade & Industry’s Legislative Programme for 2001
Adv. Strydom (Legal Services, DTI) took the Committee through the department’s legislative programme (see Appendix 1). The State Law Advisers have indicated that it will take approximately two months to certify the International Trade Administration Bill. He said that the Copyright Amendment Bill and the Performers’ Protection Amendment Bill are bound to contain issues that are fairly contentious. He has requested the Office of the State Law Advisor to attend to the certification of both Bills by no later than next week. At the request of the Minister, the Department has written a letter to the leader of government business motivating the reason behind the withdrawal of the Liquor Bill and the National Gambling Amendment Bill from the current legislative programme.

Address by National Gambling Board Chairperson
Mr Chris Fismer (Chairperson: NGB) noted that it is a legal requirement that all gambling machines outside casinos have to be linked to a Central Monitoring System. The Board had tendered for the appointment of an operator for this system. The two major competitors were Zonke Monitoring and Malini Monitoring Consortium. The tender was finally awarded to the former which is supported by IBM. Malini’s supporter is IGT (an American company). The matter has since been taken to court for review by the losing bidder. The court has ordered an interim interdict against the Board preventing it from concluding the contract with Zonke pending the outcome of the review. Malini has until 6 September to decide whether they will proceed with the review application.  He expressed his confidence that the Board would be successful in the review matter.

Mr Fismer also mentioned a Constitutional Court matter in which the Board and the KwaZulu Natal government are involved over the central monitoring system. The Minister of Trade and Industry, acting in terms of the National Act, issued a proclamation that there shall be a single central monitoring system for South Africa to monitor gambling machines in all the provinces. However, the KwaZulu Natal government published a request for proposals going into a tender process to appoint their own operator for gambling machines in KZN. The Board is of the opinion that this is contrary tot the National Act and regulations and that it is constitutionally unsound. The Board has consequently applied for an interdict against the KZN government to proceed with this. The matter will be heard on 25 September 2001.

National Gambling Board’s Research Brief on the Socio-Economic Impact of Gambling
Mr Sifiso Buthelezi (Chief Executive Officer: NGB) took the Committee through the Research Brief (see Appendix 2). He said that in 1999 the Board had commissioned research on the issue of problem gambling in South Africa. The research was undertaken by the Human Sciences Research Council. The NGB was of the opinion that that report did not cover everything. However, many interesting findings were contained in it, some of which recommended that follow-up research be conducted on specific matters.

The NGB’s research proposal is also based on some of the recommendations that the committee members had made about the need for the promotion of responsible gambling in a country such as South Africa. The NGB has taken some time to establish or ascertain what problem gambling could be. Most of the research brief focused on the social and economic impact of gambling.

Mr C. Bruce (DP) asked the Board what it considered constituted “problem gambling”. Was not gambling a vice as much as using tobacco and alcohol is?

Mr Fismer replied that this is a matter that has kept NGB busy and the National Centre for the Study of Gambling has helped in formulating a domestic definition of what is “problem gambling”. The international trend has defined it as “compulsive gambling, addictive gambling and pathological gambling”. It constitutes more than this in the South African context. There are other social factors around gambling that make an impact on the individual and his family and which are not related to whether he is addicted to gambling or not. These are factors such as poverty and the knowledge about how the game works. The matter of vice is something that influences a person’s perception of gambling.

The Chair commented that the concept of ‘problem gambling’ is closely related to “individual behaviour patterns” such as an individual who is addicted to alcohol would be dubbed an alcoholic.

Looking at the history of gambling in this country, Mr Rasmeni (ANC) said that he did not know if gambling existed in this country as a form of entertainment or as an industry. His stark question was did it really contribute to the national objectives of South Africa such as the creation employment opportunities and bringing better lives to the people?

Mr Fismer replied that the NGB does not regard gambling as an industry that has been invented by the current government, it has always existed. Control over the industry is not as in the past where there was a proliferation of illegal casinos and gambling machines. It is now controlled by legislation. The NGB still needs substantial research data to answer the question as to whether gambling has created more opportunities for South Africans or whether it has exacerbated their conditions. This also answered Ms September’s question.

Mr Buthelezi made some additional remarks concerning the history of the industry in South Africa: there were more than 100 000 illegal machines before its regulation. This had serious consequences to society. Some of these machines had never been approved by the South African Bureau of Standards as to complying with all standards that the NGB had formulated.

Ms C. September (ANC) was concerned if gambling had created any opportunities for South Africans or whether it has created deeper levels of poverty in this country. Many people are found queuing on Saturday evenings to buy lottery tickets in the hope that they might reap some rewards.

The Chairperson asked if the pending court cases would delay the rollout of the limited payout machines.

Mr Fismer replied that the court cases will have an impact on the limited payout machines outside casinos. The case involving Zonke and Malini will also have an impact depending on how long the matter lasts. He roughly estimated that this may last two to three years.

Mr Bruce asked how the Board proposes to measure the cost or the benefit of gambling to the economy of South Africa. He submitted a moral argument, saying that “regulation does not turn a vice into a virtue” and the nature of the regulation is not important. He seemed that the attitude of the government to gambling is similar to that of the previous government. It was not clear whether the government said that gambling was “a vice or a near vice”. The government had a high stake in this matter. It is accepted internationally that gambling is a poor person’s activity. Affluent people do not buy lottery tickets. He stressed that gambling was by any standards still very much a vice, and a vice of poor people. Gambling was a form of a tax on the poor. By gambling, they are paying a highly disproportionate amount of tax.

Mr Fismer replied that one should try and avoid making general statements regarding costs and benefits. He stressed that one should be able to give appropriate figures, for example, figures that reflect job opportunities that have been created and job losses, if any that have resulted from the gambling industry. He said that the NGB does not want to be judgmental in these matters and that its aim is to produce accurate figures. Thereafter, it would be for Parliament to make a decision based on figures and findings arising from the research by the Gambling Board.

The meeting was adjourned.

Appendix 1:


Amendments to the aforesaid Acts are necessary in order to keep abreast with trends in electronic or automated registration of companies and close corporations. At present the aforesaid Acts do not make any provision for the electronic lodgement of registration documents thus inhibiting potential economic activity in South Africa. The South African Companies Registration Office is currently in the process of introducing the necessary automation process to accommodate electronic lodgement of documents. It is envisaged that the process will be fully operational by April 2001, hence the need to effect the necessary amendments to the legislation in this regard.

Section 8(5) of the principal Act was held to be unconstitutional by the Constitutional Court in September 2000 on the basis that it violates section 33 of the Constitution. In brief, the aforesaid section empowers the Minister of Trade and Industry to declare that a business is being conducted in an unfair manner and accordingly to shut same down without prior consultation with the affected party. The Constitutional Court ordered that the offending section be amended within 12 months from the date of the order.

The re-emergence of South Africa in the global economy and current trends in world trade norms have necessitated that the Board on Tariffs and Trade Act be substituted in order to reflect the changes that have taken place since the enactment of this Act.

In order to effectively implement our commitment, inter alia, to job creation and foreign investment in the country, it is necessary that the functions and focus of the Board on Tariffs and Trade be revised in order for our broader economic objectives to be met.

In terms of the provisions of the Export Credit and Foreign Investment Reinsurance Act, the Credit Guarantee Insurance Corporation Ltd (CGIC) has enjoyed exclusive privileges to provide insurance for export transactions on behalf of the Government since the enactment of the Act in 1957. The Minister of Trade and Industry has terminated the aforesaid arrangement with the CGIC with effect from 1 July 2001. The proposed amendment intends to create a dedicated Export Credit Agency that conforms with
international best practice in respect of the provision for re-insurance for export transactions, investments and loans or similar facilities connected with such transactions.

The National Small Business Council (NSBC) was liquidated in 1998. It is, therefore, necessary that all references to the NSBC in the National Small Business Act be deleted and that a provision providing for alternative means for achieving the aims of the NSBC be inserted in the Act. Additional smaller amendments to the Act are also necessary to refine and clarify the role of Ntsika vis-a-vis the Department of Trade of Industry.

Cabinet has recently extended the mandate of the Industrial Development Corporation to expand its operations into Africa in light of the finalisation of the SADC Trade Protocol. There is therefore a need to amend the Industrial Development Act in 2001 in order to enable the IDC to legitimately carry out its extended mandate.


Amendments are required to the Copyright Act and Performers' Protection Act in order to create protective rights for copyright owners and performers whose rights are not presently protected by law. At present copyright owners, like composers, musicians, and performing artists are not entitled to royalties, whenever broadcasters broadcast their performances. To facilitate an improved empowerment of the South African musicians, it is important that an amendment to the aforementioned Acts be effected during 2001.

The implementation and effectiveness of the Counterfeit Goods Act are presently being impeded by anomalous provisions in the Act in respect of the rights of search and seizure of the South African Police Service, the South African Revenue Service and inspectors of the Department of Trade & Industry.

An amendment to the Act is necessary in order to clarify and confer the aforementioned rights on the law enforcement agencies of South Africa in order for the Act to be implemented effectively and expeditiously.

As counterfeiting activities and piracy of Trademarks and Copyright are rife within the country and the region, it is respectfully proposed that the Act be amended.

The provisions of the Trade Practices Act have not kept abreast of the latest trends in undesirable marketing practices, which are being practised in the market place. Since neither the common law nor any other legislation provides for sanctions against such     undesirable behaviour, it is necessary to create an offence in respect of these practices in the Trade Practices Act.

Since the enactment of the Right of Appearance in Courts Act in 1995, both attorneys and advocates are permitted to appear in the High Courts of South Africa. The Patents Act has, however, inadvertently failed to make provision for the appearance of attorneys before the Patents Commissioner, which is inconsistent with the provisions of the Right of Appearance in Courts Act. It is, therefore, necessary to address the aforesaid anomalous provision by amending the Patents Act accordingly.

The amendments are aimed at prohibiting the unauthorised use of national flags, and state emblems of other countries in terms of South Africa's international obligations in respect of the Paris Convention. The proposed amendments are intended to create consistency in respect of the provisions of the Trademarks Act and Counterfeit Goods Act so as to avoid any loopholes that may be in existence in this regard.

Amendments to the principal Act are required to streamline requirements for the accuracy of measurement standards to allow for a higher order of calibration so as to meet international standards. The bill furthermore aims to reduce the administrative burden pertaining to the control of the repair of certain specified instruments by accredited companies.


The principal Act facilitated the stockpiling of so called strategic materials during the period of isolation. Given the current political and economical environment, it's provisions have become obsolete.

16.        LIQUOR BILL
To maintain economic unity and essential national standards in the liquor trade and industry; to regulate the manufacture, distribution and sale of liquor on a uniform basis; to facilitate the entry and empowerment of new entrants into the liquor trade; and to address and reduce the economic and social costs of excessive alcohol consumption; and to provide for matters connected therewith.


Appendix 2:
National Gambling Board Research Brief

The socio-economic impact of gambling in South Africa

The South African gambling industry has grown considerably over the past 3 years.  From the determined quota of 40 casino licences countrywide, 24 are currently in operation.  These operations have a total of about 13 741 gambling machines and 471 gambling tables.

The horse racing industry has long been in existence and still has a significant market share and contribution to the gambling industry.  The Gauteng Province has licensed 17 Bingo operations, of which 8 are operational, with 3 527 seats.  Limited payout machines (LPMs) are also due to be rolled-out before the end of the year 2001 (maximum of 50 000 machines countrywide). 

The Internet also allows access to a wide range of gambling opportunities into homes, posing fresh challenges for regulation, harm minimisation and taxation.  The National Gambling Board is in the process of establishing regulatory framework around this mode of gambling which would see this type of gambling coming to life in the near future.

March 2000 saw the coming into being of the National Lottery.  The first National Lottery game, the Lotto has an average jackpot win of several million rands per week and has proven to be attractive to most South Africans.  The operator's (Uthingo) Game Plan includes introducing various games with proven universal appeal, as well as games developed specifically for South Africa, introduced at regular intervals.  In October 2000 National Lottery scratch cards (Iza Fast) were also introduced to the market.  The lotteries are accessible to communities previously inaccessible to legalised form of gambling and are available from more than 5 000 outlets countrywide.

The growth of the gambling industry provided access to gambling opportunities to communities and individuals previously inaccessible thereto.  From the Human Science Research Council baseline research (June 2000) conducted on behalf of the NGB, it is estimated that approximately 4% of the adult population in South Africa engage in gambling activities (legal and illegal).  This percentage could be higher, noting that fieldwork for the research was conducted during March and June of 2000, when the Lotto had just been launched.  Accordingly, the percentage would be expected to increase with the introduction of other forms of lotteries and limited payout machines.

Noting the newness of the South African gambling industry, there is limited research which has been conducted to comprehensively measure both the social and economic impact of gambling activities. 

The current investigation is a comprehensive assessment of the socio-economic impact of the gambling industry in South Africa.  The study is to be national in scope and the research report thereof should include policy recommendations which will assist government in policy making and planning.

Following are the three phases into which the current study will be divided into. 

Phase One
1.         Research Objectives
- Measurement of the South African gambling market
- Segmentation of the gambling market in terms of available legal gambling modes in SA
- Determination of a detailed profile of the SA gambler for each gambling mode: Casinos, horseracing, betting, bingo (Gauteng), lotteries (lotto, Iza fast scratch cards).

The profile is to include all socio-demographic variables of gambling patrons throughout South Africa.  :
Marital status
Monthly household income
Number of dependent children
Residential area
In addition the following should be determined:
Preferred gambling mode (s)
Reason(s) for gambling
Frequency (per week, per month)
Average amount of money spent at each visit to gambling venue / per week / per month
Average amount spent on lotto and scratch-cards per week / month
Displaced spending - is money spent on gambling displaced from other spending
Average time (hours) spent at each visit to gambling venue
Transport mode to gambling venue
Time spent travelling to gambling venue
Awareness, thoughts and perceptions towards internet gambling
Awareness of regulatory bodies and their functions (NGB, NLB, PLAs)

2          Research methodology
Stratified proportionally according to province population and the number of gambling venues (e.g. casinos, horseracing courses, bingo halls, lottery terminals, etc.)

2.2 Respondents / subjects
1500, or 2500 Regular visitors to gambling venues, i.e. been at a specific gambling mode venue at least twice in the past 3 months, with the aim of gambling. Respondents should only have been to a single gambling mode i.e. have been to a casino at least twice in the past 3 months or to a racecourse to bet on horses, or have visited a bingo hall to play bingo, or placed a bet on a sporting event (should not have been once to a racecourse and once to a casino in the past 3 months). 

2.3 Instrument(s)
Quantitative research questionnaire(s) designed specifically to meet the above research objectives.

2.4 Procedure
Face to face intercept interviews at respective gambling venues countrywide (all 9 provinces).

Phase two
- Understanding attitudes and behaviours associated with gambling
- Determining South Africans' perceptions towards gambling
- Assess the social impacts of the gambling industry on society - according to various gambling modes
- Investigate the concept of responsible gambling and its meaning to South Africans

The social impact assessment should include the following areas:
- Social benefits of gambling - a determination of why people gamble
- Thoughts, perceptions and attitudes towards gambling - What the South African population generally feel about gambling
- Gambling facilities usage patterns - usage by low income vs higher income groups
- Crime and gambling - has the legalisation of gambling increased in decreased criminal activity within the country?  Areas of investigation to include:
criminal activity within gambling venues and their vicinity;
organised crime and money laundering
loan sharking
- Illegal gambling - current assessment of extent of illegal gambling and costs to society of such activities.
- Responsible gambling:
· To measure South Africans' perceptions, thoughts and feelings of what constitutes responsible gambling
· Perceptions of impacts of problem gambling on family systems, effects on family life, youth and gambling
· To elicit possible / preferred means and programmes to promote responsible gambling

2          Research methodology
To include interviews with:
- Gambling patrons
- Gambling operators
- Law enforcement agencies

2.2 Respondents / subjects
To be proposed by service provider

2.3 Instrument(s)
Both qualitative and quantitative research instruments to be designed specifically to meet the above research objectives.

1.         Objectives
To assess the impact of the gambling industry on the South African economy in terms of the following:
Contribution to the GDP
Contributions of various gambling modes
Gross Provincial Product of various provinces in the country
Capital investments
Foreign investments
Employment - including the profile of employment opportunities created
Black economic empowerment in the gambling industry
SMME development and support
Gambling spent as a percentage of monthly household income
Impact of gambling on consumer expenditure patterns
The extent of illegal gambling and its impact on the legal industry
The impact of the gambling industry on other industries in South Africa; for example the leisure, tourism, retail industries

To assess how the growth, development and economic impact of gambling in SA compares with other developing countries (at least 2 developing countries)

Research methodology
The methodology to gather and analyse data to meet the above objectives for this phase is to be proposed by the research supplier.

Time-lines for the three above-mentioned Phases is to be outlined in detail by the research supplier.

The proposal by the research supplier should include a detailed budget for all three phases of study.


No related


No related documents


  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: