Gambling Review Commission Report: Committee deliberations

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Meeting Summary

The Report of the Gambling Review Commission (GRC) had been placed before the Committee some time earlier, but the Committee had never had a chance to finalise it, due to other commitments. The Department of Trade and Industry (dti), together with representatives of the National Lotteries Board and Gambling Board, took Members through some of the recommendations in that Report. The dti would be compiling its own Working Paper, and the Committee was required now to consider the GRC Report and table its own report to the Minister, who could then prepare draft legislation to cover the issues raised. Dti briefly took Members through the GRC Report again, refreshing their memories on the purpose, policy background and content. Attention was drawn, in particular, to the question of online gambling, the need for reform and restatement of the laws and regulations relating to the regulatory bodies, the new forms of gambling that would be covered, such as electronic Bingo terminals, online gambling, betting exchange, and greyhound racing, and the social impact of gambling. The GRC had made a number of recommendations to enhance work on gambling.

Members asked about the tenure of the Board, whether the members should be permanent, discussed the concerns about the making of decisions, and suggested that perhaps the Board needed to comprise full-time members. Members asked how South Africa could be isolated from what was going on globally, wondered how online gambling, in particular, could be controlled, whether cyber-inspectors were in place and how under-18s would be protected. They wondered why such old statistics were quoted and wondered what frameworks would be put in place to regulate sports betting, and asked the reasons behind the distinction between horse and greyhound racing. Members noted that there had been different standards applied by different bodies and urged uniformity, although the Chairperson raised the question whether there was not also a risk of over-regulation and wondered if there were not other alternatives. Questions were asked as to why fah-fee was never regulated, whether the views of those totally opposed to gambling were taken into account, and whether anything was planned to address gambling addictions, and whether forex trading by individuals, which could be considered a form of gambling, would be covered.  The dti said it fully recognised the need to strengthen the Council, and concurrent jurisdiction was also mooted. The National Gambling Board and dti commented on the issues raised and summarised what had been raised in the Report.
 

Meeting report

Gambling Review Commission Report: finalisation
The Chairperson noted that the Committee had been unable to attend to the finalisation of the Report on the Gambling Review Commission (the Report) because of other parliamentary duties, but this meeting was called to try to finalise it.

Ms Zodwa Ntuli, Deputy Director General: Corporate and Consumer Regulation, Department of Trade and Industry, said that the initial Report, compiled by the Gambling Review Committee (GRC),  had been presented to the Committee in March 2012. The purpose of this Committee was to refresh Members’ memory, to apprise them again of the findings and recommendations made by the GRC, and to solicit inputs from the Members on what needed to be done by way of legislation. Experts were brought in to shed light on areas where explanations may be needed.

She noted that she had a conflicting commitment, to attend to the Minister’s Press Briefing, and asked that Mr Macdonald Netshitenzhe, Chief Director: Policy and Legislation, Department of Trade and Industry, should make the presentation.

Mr Netshitenzhe noted that the Report, which was tabled, was a Report of the GRC, but not yet of the Department of Trade and Industry (dti). Following the adoption of the Report, the dti would have to come up with a Working Paper.

He took the Committee through the objective, policy background and overview of the GRC. He highlighted the points made on the social impact of gambling, and the new forms that gambling would take, such as electronic Bingo terminals, online gambling, betting exchange, and greyhound racing. A review of the regulatory framework for gambling was formulated. Diverse recommendations were made by the GRC to enhance a better working level for gambling, and these were also summarised in the Report (see attached document for full details).

Discussion
The Chairperson agreed that the dti would need to proceed with drawing up a Working Paper. He asked about the tenure of the Lotteries board, and raised concerns that since the board members were not permanent, there might be problems with their commitment and availability.

Mr K Sinclair (COPE, Northern Cape) thought that the National Lottery Board members should be full time.

Ms E Van Lingen (DA, Eastern Cape) asked if other people present were permitted to contribute on the issue.

The Chairperson granted this request.

A participant from Durban said that his company was interested in the online gambling scheme and said that he would be happy to answer any questions, if needed.

Another participant said that she was present in a private capacity. She wanted to know how online gambling could be regulated, and how the populace could be shielded from the dangers that it posed.

Mr K Sinclair (COPE, Northern Cape) made the point that South Africa was part of the global society and asked how it was possible to isolate it from the gambling going on in the rest of the world.

Mr Sinclair noted that the statistics quoted dated back to 2008 and asked why the Committee was still making use of such old information. He took note of the decline in the statistics from 72% to about 41%. He raised concerns about the availability of a framework to regulate sports betting. He was also concerned how these issues would tie in with Company Law.

Mr Netshitenzhe said that indeed the statistics quoted on page 75 were quite old, but asserted that they were still relevant and could be used to judge the changes or levels of improvements or decline.

He agreed that the quorum issue was not working well, and said that the Minister would have to make some changes. Various propositions were put forward on the methods of coming to decisions at meetings, including whether proxy votes should be allowed.

Ms Van Lingen questioned what the real purpose of this meeting was, and the Chairperson answered that Members were being asked to make any input into the draft Report, which was being drawn to present to the Minister so that the issues could be formalised.

Ms van Lingen asked why there was a differentiation between greyhound racing and horse betting.

Ms van Lingen referred to the regulatory framework, and asked if there were minimum standards for the bodies, and if there was lack of uniformity in the regulations in the different provinces.

Mr Netshitenzhe acknowledged that in relation to the standards, there was a problem in some of the provinces. However, the issues set out on page 101 of the Report were being addressed, and the regulators would in future be bound to have harmonised standards and minimum thresholds. This would be implemented through the Regulations.

Ms B Abrahams (DA, Gauteng) asked how under-18 children would be protected from online gambling.

The Chairperson had similar concerns in relation to those under-age and asked what kind of inspection would be envisaged. He asked if there were any plans to bring cyber inspectors on board. He stressed that some kind of oversight functions should be established, to aid in the effectiveness.

Mr Netshitenzhe said that at the moment there were no cyber-inspectors. Dti was looking to establishing them, and was hoping to benchmark with other countries that had advanced in such areas. It was confirmed that it was indeed possible to regulate online gambling.

The Chairperson cautioned that perhaps the whole issue ran the danger of over-regulation, and asked if an alternative could be sought, in place of the regulations.

Mr Netshitenzhe asserted that the regulations had to be in place so as to forestall excesses and involvement of criminal elements. He noted that every individual would have to play a role  - such as politicians, ministers, police and the information and communication departments - to curb criminality. Agencies would be enrolled to check and ensure the enforcement of regulations. At the moment, the online regime was not yet regulated, so nothing could yet be prevented. However, he also stressed that online gambling was one conducive environment for trade, if properly controlled.

Ms Abrahams noted that, to the best of her knowledge, fah-fee had never been regulated, and asked why this was so.

Mr Netshitenzhe said that the fah-fee had been seen as a bilateral scheme and its legality was still under question. Dti had elected to do further research on it and make known its standpoint at a later stage.

The Chairperson asked if the GRC had heard the views of those who were opposed to the very idea of gambling and asked how this set of people would be protected.

Ms M Dikgale (ANC, Limpopo) asked if any funding was allocated to help solve the problems of gambling addiction. Proper education and awareness should be carried out to re-orientate them on the use of the Fund.

Mr Netshitenzhe said that the contribution to the Fund was voluntary as companies involved wanted to help make provision to assist those who developed a gambling addiction, and help in rehabilitating affected individuals where necessary.

Mr Netshitenzhe reiterated that this Report did not emanate from the Department. The Minister would only be formulating legislation after having received a Report from the Committee.

Ms Temba Marasha, Chief Compliance Officer, National Gambling Board, also reiterated that the Report was that of the GRC, and she explained that the steps taken to take that Report further included extensive liaison with the National Assembly and NCOP, to address the issues raised. She reiterated that there was a need to look into the regulations and to overhaul the regulatory bodies governing gambling.

The Chairperson confirmed that after scrutinising this Report, the Committee would write its own report and sent it to the Minister of Trade and Industry to action.

Prof Linda De Vries, Chairperson, National Lotteries Board, assured the Committee that the Board intended to continuously carry out research and formulate regulations around gambling, although there was no legal framework on some of the issues at the moment.

Ms Van Lingen raised concern on the position of the Board, which she felt was maintaining a comfort zone. She wondered if there was any draft of legislation or suggestions

The Chairperson answered that the Committee would be looking into the issues and formulating a report that would then be used to take the legislative process forward.

Ms Ntuli, who had managed to return to the meeting at this point, elaborated more on online gambling, and referred the Committee to the recommendations relating to online gambling. Online gambling could include “normal” casino activities and offerings being accessed online on a computer, instead of the gambler going to the casino. Inter-active gambling was not currently allowed in South Africa but there was draft legislation to legalise and implement it. Any body dealing with gambling must be empowered also to deal with issues specific to online gambling too.

She noted that the council was not the only way in which decisions could be made, and it was currently only bound to meet twice per year. However, it was admitted that there was a need to strengthen its role. A regional consultation scheme was being considered, to make the decision making process more efficient.  Concurrent jurisdiction was also mooted as a solution to ease the current decision making hurdles. She also noted that there was policy being formulated to deal with the lottery agencies.

Mr Sinclair sought clarification on the Council. He admitted that he had been confused because there was no clear directive on its duties, appointment and tenure. He thought that the Council, as a statutory body, should not be over-ridden by regulations. He thought that the Banking Council was also instrumental to the whole process and should be duly incorporated.

Mr Sinclair suggested that the question of rehabilitation should not only be covered by policy, but clear regulations on it were needed.

Mr Sinclair was also concerned at what he termed “the internet stampede on forex trading”. He suspects that at least a part of this was gambling and wanted a means of dealing with that.

Ms Baby Tyawa, Chief Executive Officer, National Gambling Board, also commented on the issues raised. She assured the Committee that South Africa and its neighbouring countries were willing and committed to prosecuting and refunding money illegally obtained by companies in their domain.

Ms Tyawa noted the concerns about the need to curtail and control illegal online gambling. There were various means by which this could be regulated. For example, a casino registered on the “co.za” portal could be effectively monitored and its activities curtailed where necessary, and this could be made part of the requirements for the registration of such casino. It was impossible to shield South Africa from the effects of globalisation, including gambling, but re-emphasised the idea of registering and regulating the activities of the casinos. It would also be important to try to put in place measures that had been effectively implemented in other countries to curtail illegal or undesirable activities. Bilateral agreements would be reached with sister countries to aid in prosecuting offenders in their own countries, especially with money laundering.

Sports and, most importantly, lottery betting had been addressed in the report, and it was noted that these would continue, under the control of the National Lotteries Board. He noted that there was considered to be a difference between greyhound and horse racing, because of the actual activity that the individual was placing bets on.

Ms Tyawa noted the concerns about under-age gambling, and said that the legislation would insist upon proof of age being produced, to show that a person was legally entitled to gamble, and those under-age would not be permitted in casinos. In respect of online gambling, a person would have to signify this by payment, preferably with a credit-card and this would not generally be issued to those who were under-age. These were some of the controls that would be put in place to curtail it. She also added that although cyber-inspectors were not in place yet, the dti would be making them available to combat the concerns.

Ms Ntuli re-affirmed that the Council was a statutory body comprising of the Minister and nine provincial representatives.

The meeting was adjourned.
 

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