National Gambling Amendment Bill: public hearings day 2

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Trade and Industry

26 October 2018
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Portfolio Committee on Trade and Development held public hearings on the ­­National Gambling

Amendment Bill for the second time in the week. The participants included the Western Cape Bookmakers’ Association and the Gauteng Off-course Bookmakers’ Association, Sun Slots, Ithuba, the Western Cape Gambling and Racing Board and the Western Cape Government.

The Chairperson requested presenters to address two issues from the October 2018 version of the Bill: the proposal to replace the National Gambling Board with a National Gambling Regulator, and to permit the National Policy Council to make decisions without a quorum at a follow-up meeting, in cases where there had not been a forum at the original meeting.

The Bookmakers’ Associations were not in support of the re-organisation to give a single CEO all the powers of the National Gambling Board. In their view, it was inappropriate centralisation of power and undesirable not to have a governing board. The oversight of gambling should be managed by a board because of the need for a range of skills and expertise. The appointment of ad hoc committees to assist a Gambling Regulator would lead to uncertainty and inconsistencies, as well as regulatory issues. The Bookmakers’ Associations did not see the need for an additional electronic monitoring system over and above the ones that were currently in place and which provided the Provincial Licensing Authorities with all the information that they needed in respect of gambling levies and taxes. There were enormous problems with people applying for licences in different provinces, each of which had different requirements. The Gambling Policy Council had been a failure and should be disbanded. Gazetted norms and standards would ensure uniformity in a way that the Council would never be able to achieve.

Ithuba, the National Lottery Operator, informed the Committee that there was on-going litigation between bookmakers and Ithuba because the bookmakers were offering bets on the outcome of Lottery results which meant that they exploited the propriety products of Ithuba, causing it an annual loss of revenue of between R1 bn and R2.7 bn. Ithuba believed that a regulator should be able to deal with the matter. Ithuba strongly supported the proposed appointment of a National Gambling Regulator and suggested that the Gambling Regulator and the National Lottery Commission should be merged. Section 16 of the Bill should be enhanced to allow the Gambling Policy Council to facilitate between the National Lottery Commission and the provincial licensing authorities.

Sun Slots addressed only the proposed establishment of a National Central Electronic Monitoring System. Sun Slots stated that having a single monitoring system was not only anti-competitive, but it also prevented variety. Because the current provider of the monitoring was licensed for a limited period, it created uncertainty for the provider and prohibited improvements of the system, resulting in inefficient and outdated systems. Sun Slots recommended that organisations be given the freedom to determine their own, most appropriate, monitoring system to which the authorities would be given access.

The Western Cape Gambling and Racing Board was concerned about new provisions in the Bill regarding a change in the model of managing gambling because it was constitutionally a concurrent function and those provisions impacted on ten pieces of legislation – the National Gambling Act and nine pieces of gambling legislation in the provinces. The law currently accorded distinct competencies to national and provincial regulators in relation to the regulation of gambling. South Africa currently had a good model that worked and was best practice for Africa. It was dealing with the practicalities of the council. A board or regulator would face challenges and the unintended consequences of a regulator would have to be examined.

The board noted that interactive gambling was rife and was there to stay. It was better to regulate it than to attempt to clamp down without effective methods of doing that. Interactive gaming was huge in the country but was not subject to fair play or payment of taxes, nor was support given to online and interactive gamblers. The board also suggested that, the Policy Council use the round robin method to vote, as advocated in the Companies Act. That would entrench consensus and discussions in the process

The Western Cape Government, represented by the Provincial Treasury, informed the Committee of the importance to provincial governments of the revenue that stemmed from gambling licences. Changes to the Gambling Act would impact on provincial revenue as, apart from the equitable share, was second largest provincial income behind vehicle licences.  Schedule 4 of the Constitution listed the functional areas of concurrent national and provincial legislative competence and included gambling matters. The establishment of norms and standards had been an ongoing process and was supported by the Western Cape Government.

Members asked whether it would not be preferable to have a regulator with managers having specific portfolios under a CEO instead of ad hoc committees. Did bookmakers make a contribution to the National Responsible Gambling Fund? Was there currently a product in the market for monitoring or, if not, what would it cost to create such a system? What were the challenges that Ithuba experienced with bookmakers? Could Ithuba explain the challenges and say how legislation could make it worse, or assist Ithuba with its challenges? Why support a Board that had been toothless and had not transformed the industry? Could the bookmakers say what was wrong with the proposed National Gambling Regulator and explain why they had said it would not work?

The Chairperson made the point that the purpose of the gambling legislation was not to raise revenue, but to regulate gambling. It was to regulate a sector of which many of the faith sector and justice and correctional services had a very different perspective. People in provinces looked at the revenue but had not looked at the pathological issues and the costs that arose as a result of gambling. The Chairperson noted that most submissions, from Ithuba to those on interactive gambling, acknowledged that there was a challenge with compliance.

It was agreed that the Department would report back on the submissions received on the Bill next Tuesday. Presenters were invited to send additional comments before then.

Meeting report

Opening remarks

The Chairperson welcomed the team from the Department of Trade and Industry under DDG for the Consumer and Corporate Regulation Division, Dr Evelyn Masotja. The Chairperson informed the Committee that Parliamentary Law Advisor, Adv Mabulelo Ruda, would be assisting with the National Gambling Amendment Bill.

The Chairperson requested Members to look at the person responding to their questions and to refrain from tinkling on their keyboards and not to leave before the end of the hearing. She congratulated Ms P Mantashe (ANC) on the occasion of her birthday.

Dr Evelyn Masotja acknowledged the presence of officials from the National Gambling Board and the Chairperson welcomed them to the meeting.

Presentation by the Western Cape Bookmakers’ Association and the Gauteng Off-course Bookmakers’ Association

Ms Alicia Gibson, Consultant, represented the two Bookmakers’ Associations. She was a partner in the Gambling Compliance Consultancy and had extensive experience in the industry.

Ms Gibson stated that the National Gambling Amendment Bill (NGAB) that had been published in July 2018 had been replaced by a leaner Bill in October 2018, so she was only going to address issues in the new version of the Bill, as requested.

Ms Gibson began by focusing on the reconfiguration of the National Gambling Board (NGB). The Bookmakers’ Associations were not in support of the reorganisation to give a single CEO all the powers of the NGB. It was inappropriate centralisation of power and undesirable not to have a governing board. Internationally, the oversight of gambling was managed, largely, by a board because of the need for a range of skills and expertise.

She noted that there would be a range of ad hoc committees to assist the CEO to exercise his or her duties. That arrangement would lead to regulatory issues that would be difficult to manage, especially as the maximum of five members of each of the ad hoc committees would be appointed without meeting probity standards. It was a case of one step forward and two steps back. The National Gambling Act called for suitable members, but did not call for a process of probity on board members. Without that, the governance challenges that had arisen in the past would likely arise again. She submitted that it was necessary to re-establish the NGB, but with probity and to ensure that it was properly managed.

She noted that the Bill promoted an expanded gambling programme. The Bookmakers’ Associations felt that there was no need for a broad-based educational programme because it was trying to fix something that definitely was not broken. The National Responsible Gambling Programme (NRGP) was of the highest quality and one of the most respected programmes in the world. Ms Gibson recommended that the NRGP be expanded and that the National Lottery Fund should support the programme because the majority of gambling in the country was via the National Lottery.

Ms Gibson stated that the central electronic monitoring system (CEMS) proposed in the Bill was another attempt based on inaccurate or incomplete info to fix something that was not broken. She had been told that that provincial authorities’ could not get details of gambling data, specifically for levies and taxes. However, hand on heart; she could state that all authorities could see the data at any time. There were technical standards and a full audit trail was required of all transactions. Provincial Licensing Authorities (PLAs) received all the information from the current monitoring systems. The current CEMS had been required for the monitoring of limited pay out machines (LPMs) that were all over the country. It was a purpose-driven system. The disadvantage of a new monitoring system was that it would be extremely costly and complex to have a single electronic monitoring system. Bookmakers could not support the introduction of a new monitoring system.

The long title of the NGAB showed the purpose of the Bill, which was an attempt to deal with dispirit approaches to gambling legislation in the provinces. There were enormous problems with people applying for licences in different provinces and there being different requirements. Originally the Bill had attempted to apply certain duties to the national body and other duties to provincial bodies in a bid to reflect the concurrent nature of gambling in South Africa. The Council was a consultative forum that was intended to discuss provincial matters and to reach consensus. It did not have enforceable powers. However, the council had not delivered any positive results. The failure of the council to deliver on its mandate was well documented. Only eight meetings had been held and, of those, only three meetings had registered a quorum. The Bookmakers’ Associations could not agree to the roll-over of decisions to a second meeting where there was no need for a quorum. The Council should be disbanded.

Discussion

Ms P Mantashe (ANC) proposed that the Committee move on to the next presenter and take questions at the end.

Mr D Macpherson (DA) asked Ms Gibson whether it would not be preferable to have a regulator with managers with specific portfolios under a CEO instead of ad hoc committees. Did bookmakers make a contribution to the National Responsible Gambling Fund?

Ms E Ntlangwini (EFF) asked how the hearing was to be structured. She had some questions but did not know if she should put the questions before the next presentation.

The Chairperson said that in the interests of time, the Committee would take three presentations before taking questions. She asked that presenters be seated close to the front of the chamber. While the presenters were moving, the Chairperson thanked Mr A Williams (ANC) for chairing the hearing earlier that week.

Presentation by Ithuba

Ms Cynthia Mabuza, Group CEO, Ithuba, presented on behalf of Ithuba, which was the exclusive licence holder of the National Lottery. It was a wholly black-owned company that provided about 25 000 job opportunities. The National Lottery was the biggest contributor to good causes.

The National Lottery was one of the most regulated modes of gambling and had a revenue maximisation to support good causes. Ithuba supported the Bill. A National Gambling Regulator (NGR) should be constituted as soon as possible and Ithuba suggested that the there be a merger between the NGR and the National Lottery Commission (NLC) as recommended by the Gambling Review Commission of 2012.

There was on-going litigation between bookmakers and the National Lottery Operator because the bookmakers were offering bets on the outcome of Lottery results and exploited the propriety products of Ithuba, causing it an annual loss of revenue of between R1 bn and R2.7 bn. Ithuba believed that there should not be a need for organisations in the gambling industry to go to court and that a regulator should deal with the matter. Section 16 of the Bill should be enhanced to allow the Gambling Policy Council to facilitate between the NLC and one or more provincial licensing authorities as well. Clause 22 should also be enhanced to include disputes between provincial licensing authorities and the National Lottery Operator.

Mr Williams briefly took up the position of Acting Chairperson.

Sun Slots

Mr Alex Abercrombie, Chairperson, and Mr Felix Mthembu, CEO and C0-Director, of Sun Slots made the presentation.

Sun Slots was licenced to operate 3 800 Limited Pay out Machines (LPMs) in four provinces.

When the 1996 Act had been repealed, the Regulations were also repealed. Regulations had been drafted following the 2004 Act, but there were gaps in the new regulations. There were no regulations dealing with LPMs.

The Gambling Review Commission of 2012 had proposed an increase in stakes and Sun Slots was asking for that to be included in the current regulations, as well as an increase in the number of seats allowed, and for the regulations to apply to bingo as there was currently no limitation on the outlets or number of seats in a bingo operation, as opposed to the limit of 40 seats for the LPMs. Sun Slots was asking for fairness across the types of gambling in a revised set of regulations.

Clause 19 of the Bill proposed the establishment of a National Central Electronic Monitoring System (NCEMS). However, a central electronic monitoring system (CEMS) had been established to provide a monitoring system for LPMs to monitor payment of gambling levies and taxes. Having a single NCEMS was not only anti-competitive but it also prevented variety. Because the CEMS provider was licensed for a limited period, it created uncertainty for the provider and prohibited improvements of the system resulting in inefficient and outdated systems. Sun Slots recommended that the same approach be taken with LPMs as with casinos, so that organisations could select any suitable monitoring software in the same way that casinos selected their own monitoring software.

In Australia, gambling was monitored in real time and the system could even show when a machine broke down. Sun Slot proposed that LPM operators be permitted to use their own monitoring systems while providing access to the authorities.  At six percent of GGR, the system was costly, especially for the currently unreliable system.

Discussion

Mr Macpherson asked Mr Abercrombie of Sun Slots what he meant by saying that a single NCEMS would prevent variety. He had spoken about the unreliability of the current CEMS and that it should be scrapped.

Was there currently a product in the market for monitoring or, if not, what would it cost to create such a system?

Mr Macpherson asked Ithuba about the challenges experienced with bookmakers. Could Ms Mabuza explain the challenges and say how legislation could make it worse, or assist Ithuba, with its challenges?

Ms Ntlangwini asked Ms Gibson for a proper submission on clauses that the bookmakers were seeking to amend. She had spoken of the scope for legal challenges and needed to explain further. She said that NCEMS was expensive. In what way was it expensive? What did she mean by expensive? Could Ms Gibson please provide exact figures and challenges? She was not happy with the bookmakers’ submission.

Ms Ntlangwini stated that she was in support of Ithuba and liked the idea of one entity being on top and not too many heads so she supported Ithuba’s proposal. One could not have an industry where each province was a law unto itself. She could not have that. That would not benefit the country. Ithuba said that it was giving back R4 bn to good causes. How much were the bookmakers giving back? Could Ms Mabuza elaborate on the challenges that Ithuba was experiencing?

Mr B Radebe (ANC) appreciated all the presentations. As the Bookmakers’ Associations were in favour of retaining the Board, he had a serious problem. There were serious problems under the Board. In horse racing, the grooms were the Cinderellas and nothing had been done for them so they had had to take their issues to the Public Protector. Why support a Board that had been toothless and had not transformed the industry? A regulator would ensure transformation as it would be a central body.

South Africa was a unitary state. One could not have the provinces running amok and behaving as if they were not in South Africa. The industry was the winner. The ordinary people were not the winners and one could not have provinces giving licences day in and day out at the expense of the communities. He had seen old people in a casino losing money, so the people had not been protected.

Ms Ntlangwini asked for more clarity on the bingo aspect.

The Chairperson referred to a comment by Ms Gibson on the quorum of Council. Ms Gibson had asked why the council was needed. She had indicated that if a meeting did not quorate, the majority were bound by the decision of a few people. The King’s Governance Report, which had been internationally acclaimed, had explained that the quorum could be used to break systems so that decisions could not be taken. The King’s Governance Report recommended that mechanisms be built into constitutions to prevent that from happening, such as after two non-quorate meetings, decisions could be taken on the third occasion. She asked Ms Gibson to engage the Committee on that issue and clarify the Bookmakers’ Associations position on that.

With reference to bookmakers, it appeared that bookmakers did not have to contribute to the social well-being of the community. And if not, why not? All presenters could comment on that point. 

Mr Mbuyane (ANC) stated that there was a National Credit Regulator (NCR), and there had been challenges in setting that up, but it was currently working. Could the bookmakers say what was wrong with the proposed National Gambling Regulator and explain why they had said it would not work?

The Chairperson asked Sun Slots to clarify what it had said about the monitoring of gambling and whether gambling was being carefully monitored. She also asked for more information about the regulations that Sun Slots had referred to. It was about the repeal of the 1996 Act and the repeal of the accompanying regulations. Was there any substance to the view that there were gaps in current regulations?

Ms Gibson responded to Mr Macpherson’s question regarding a structure with managers. She remarked that such a structure would exist in any event. Regardless of whether it was a board or a regulator, there would have to be various departments and managers. She emphasised that there was a need for collective expertise in the decision-making functions. There was a concern about the consequences for the industry of a single person making a decision, and the risks involved and the Fair Administration Action consequences of impartial or unfair decision-making in the context of a single decision maker. She suggested that complementing the person’s powers with ad hoc committees was an attempt at taking the organisation back to the situation where there was predictability and consistent decision making.

Ms Gibson explained to Ms Ntlangwini that the Bookmakers’ Associations had submitted a lengthy written submission and she would talk, rather than present, owing to the time constraints. Fair Administrative Action meant that decisions were taken without sufficient consideration of all relevant issues and to ensure that no arbitrary decisions were taken. She was referring to all aspects of the Promotion of Administrative Justice Act, 2000. A Regulator would have a lot of balls to juggle. That was the scope for legal challenges.

Ms Gibson stated that the cost of a single national electronic monitoring system had been quantified during the presentations on the Wednesday, two days earlier. She could not remember precise costs, but it was clear that a single system would be very expensive.

In response to Mr Macpherson’s question about whether bookmakers made contributions to the National Responsible Gambling Programme, she stated that bookmakers made a contribution of 0.1% of GGR.  Everyone in the industry contributed, except the operator of the national lottery. The contribution amount had been collectively agreed upon when the programme had been introduced. She had not expected a question on community investment because of the scope of the presentation. She could say, in general terms, that  bookmakers did embark on social corporate investment measures but that such measures were governed by licencing restrictions. She did not have specific details to hand.

Ms Gibson informed Mr Radebe that the issue of the grooms had not been addressed by the NGB or PLAs because horse racing was governed by the National Horse Racing Society. PLAs had no power over any aspect of the sport of horse racing.

In responding to the Chairperson, Ms Gibson stated that, given the extent of the mandate of Council and what had emanated from the Council over the years, it was evident that the body was not functioning and had not done so in the course of the lifetime of the Council, so there was little likelihood of it functioning. The proposed matter of not requiring a quorum in a second meeting would simply entrench delinquency.  The Minister had the authority to regulate norms and standards for the industry and the Bookmakers’ Associations proposed that the Minister determined those national norms and standards, requiring provinces to fall in line.  That would be a much more effective vehicle for ensuring national norms and standards. Legislative instruments were the best expression of government policy.

Regarding the NCR, Ms Gibson assumed the question related to whether one had a board or not. She suggested that the comparison was difficult but one had to look at the nature of the mandate and the mandate of the NGR was considerably more complex than that of the NCR.

Ms Mabuza recapped the challenges experienced by Ithuba and where the gaps were. Ithuba had spent about R100 million to develop the Intellectual Property (IP) for the draw show on TV, and the infrastructure that Ithuba had to keep to ensure that the broadcast ran on a daily basis. Results were broadcast on a daily basis and then bookmakers used the results without bearing any of the IP costs.

The Chairperson asked for greater clarity as she did not understand the gripe.

Ms Mabuza explained that there was, at that time, a case with the courts that dealt with the IP rights of Ithuba. Ithuba spent hundreds of millions of Rand on an annual basis in producing television shows to present the results of the lottery draw. Bookmakers took fixed bets on the results of the lottery without bearing the costs or contributing to the cost of the shows because there were gaps in the regulations. She stated that bookmakers sponged off Ithuba’s IP rights.

The Chairperson asked Ms Mabuza to put the matter in writing for the Committee, indicating exactly which clauses related to the matter.

Ms Bodasing, Polarity Consulting Legal Advisor to Ithuba, informed the Committee that there was a fragmentation in the gambling industry in the way that it was regulated because there were provincial and national regulating authorities, the National Gambling Board and the National Lottery Commission. Ithuba’s main point was that operators could choose a regulator that fit their approach. A National Gambling Regulator responsible for the entire industry would prevent fragmentation. Ithuba understood that gambling was a concurrent function, so it was not saying that the provincial bodies did not serve a purpose, but the implementation of national norms and standards and a national regulator would be a better approach.

Mr Mthembu responded to Mr Macpherson on the central monitoring system. He confirmed that there were alternative systems were in the market. That was evidence in the responses to the Request for Proposals (RFP) by the NGB two years back when the current CEMS operator was appointed. There were numerous applicants and four operators had been short-listed. As to variety and competition, the industry wanted the opportunity to source the best system and most efficient system. Sun Slots also believed that the very high pricing structure for monitoring stemmed from a lack of competition. What did a monitoring system cost? He had been told that it cost in the region of R15 m to develop a system. Operational costs were extremely high. Sun Slots could reduce that amount by contracting with suppliers, or alternatively purchasing a system. In addition, their principals, Sun International, had a system on which Sun Slots could piggyback to bring down costs. The 6% monitoring fee could be reduced to 2%.

The Chairperson thanked the presenters. It was clear that Ms Gibson’s clients, the bookmakers, believed that a board was preferable to a regulator, and that her clients did not support the notion of removing the requirement for a quorum in a follow-up meeting. Ithuba preferred a regulator and the quorum had not been discussed. Sun Slots had not given an opinion. She asked them to clarify.

Mr Macpherson suggested that the six percent monitoring fee seemed to be a revenue-funding model for the NGR. He had not heard of any other reason for the monitoring fee. He disagreed with Ms Gibson regarding the risks for a single decision-maker. The NCR was an example of the model of a regulator and it was accountable to the parliamentary committee. The idea that there was no accountability for their decisions was an unfair assumption. He found it odd that the Bookmakers’ Associations wanted the policy body scrapped as it was not meeting, even though it was a collective body. There was nothing to indicate that a board would be more accountable. He did not understand why a single decision maker would be liable to a legal challenge.

Mr Abercrombie responded to the question on bingo machines. They were the same as casino machines but there were no regulations covering them. That needed to be addressed in either the Act or the Regulations. There had been specific regulations under the 1996 Act but the regulations under the 2004 Act had not incorporated specific regulations for bingo machines.

Regarding the Board or Regulator, he stated that the Sun International Group had addressed the issue through CASA’s submission. He had come specifically to address LPMs.

The Chairperson told Mr Abercrombie to get hold of a mandate and to send it in writing.

Ithuba indicated that it did not operate in the sphere of the Policy Council because the Minister represented it on the Council. However, Ithuba believed that the Council served a very critical role of governance and did not want it disbanded. Ithuba had no objection to what was in the Bill.

The Chairperson asked for that response in writing.

Mr Mthembu agreed with Mr Macpherson’s view that the six percent monitoring fee was indeed a funding kitty for the NGB. It was a punitive cost to Sun Slot and to the small businesses running LPMs. The money could be used elsewhere. One could still ensure compliance and monitoring without the six percent. The R220 m collected annually could be used more effectively elsewhere while the authorities could view the data on an inhouse monitoring system, at any time, to ensure compliance.

The Chairperson noted that the Committee had the received copies of the written submissions and would refer to those.

Ms Gibson responded to Mr Macpherson. She noted that Mr Macpherson disagreed with her view and had indicated that the NCR was answerable to Parliament. She had not suggested that the decision maker would not be accountable for decisions, but that the mandate was too wide for the decisions to be taken by a single decision maker. There was a multitude of decisions to be taken. There were risks related to the unavailability of the regulator and issues such as succession planning would have a heightened focus. The NGB should certainly be accountable to Parliament.

Western Cape Government, represented by the Provincial Treasury, and the Western Cape Gambling and Racing Board

Ms Yvonne Skepu, Manager of Legal Services, represented the Western Cape Gambling and Racing Board (WCGRB) while Ms Claire Horton, Economist, represented the Western Cape Provincial Treasury.

Ms Skepu stated that WCGRB was concerned about new provisions in the Bill: Section 33(l) and the insertion of subsection (fA) in Section 87 of the principal Act. Those provisions impacted on ten pieces of legislation – the National Gambling Act and nine pieces of legislation in the provinces. The law currently accorded distinct competencies to national and provincial regulators in relation to the regulation of gambling, i.e. the provincial regulators issued national and provincial licences and enforced compliance while the National Regulator exercised oversight and was responsible for maintaining certain national regulatory registers. What were the powers of the proposed NGR? Could the NGR over-ride a decision of the PLA, which included a public comment and hearing process, or would it merely be a rubber stamp? WCGRB recommended that the Minister should develop norms and standards and draft regulations in terms of subsection (fA) as to what PLAs should reside over. The national regulator could monitor the compliance of LPMs.

In respect of the quorum issue, WCGRB did not support decisions taken by a minority but suggested that, in exceptional circumstances, the council use the round robin method to vote, as advocated in the Companies Act. That would entrench consensus and discussions in the process.

Ms Skepu referred to the proposed repeal of Item 5 of Schedule 1 dealing with the development of interactive policy. The WCGRB board believed that interactive gambling was rife and was there to stay. It was better to regulate it than to attempt to clamp down without effective methods of doing that. Interactive gaming was not subject to fair play or payment of taxes, and the National Responsible Gambling Programme would have to jacked up to address online and interactive gambling concerns.

Ms Horton addressed the question of revenue and stated that her oral presentation did not replace the written submission. The fiscal framework was one where provinces were heavily dependent on the equitable share of revenue provided by national. Changes to the Gambling Act would impact on provincial revenue as, apart from the equitable share, was second largest provincial income behind car licences.

Schedule 4 of the Constitution listed the functional areas of concurrent national and provincial legislative competence and included gambling matters. The establishment of norms and standards had been an ongoing process and was supported by the Western Cape Government. In the new Bill, there were references to various engagements of the NGR with the Minister, provincial authorities, etc. but there was no reference to engagements between the proposed National Gambling Regulator and the MECs of provinces that represented the legitimate provincial legislature interest in matters relating to gambling.

Section 65 stated that the NGR may monitor socio-economic patterns of gambling activity, etc. Socio-economic patterns had to be monitored and assessed. It could not be a “may” monitor. It had to be “must” monitor. Section 65A of the Bill on the NGR CEO and Deputy of CEO, was silent in terms of the skills that such a person should hold. The minimum qualifications and experience should be stipulated in the Bill. The wording suggested that the Minister might appoint multiple Deputy CEOs but, in the interests of good governance, the Western Cape Government wanted that limited to one Deputy CEO.

Discussion

Ms Ntlangwini referred to the quorum situation. She was not comfortable with giving people responsibility and then having to beg them to attend meetings. She was also not comfortable with taking paper resolutions. The Committee had to find a proper solution to keep people accountable. There were too many people involved. Once a round robin was in the legislation, there would never be any meetings. One needed to sit down with warm bodies.

Mr Mbuyane asked about the challenges in terms of collaboration and integration of the Board, PLAs and NGR.

The Chairperson thanked the presenters for being very specific as that was very helpful. The Chairperson noted that the WCGRB had stated that the Policy Council decisions were expected to be by consensus and, only if there was no consensus, was there a need to vote. The Chairperson did not believe that one could take a vote if there was no quorum, i.e. via a round robin. All presenters were well aware of what had happened regarding the quorum and there was currently an opportunity to address the matter.

Ms Skepu understood Mr Mbuyane’s question to be asking whether there could be one national regulator with provincial offices. That would be to go to a different model from the current one. All ten pieces of legislation would have to be repealed: the NGA by the House of Assembly and the National Council of Provinces, and each of the nine provincial Legislatures would have to repeal its provincial legislation. It would be a mammoth task and would be dependent on having the necessary majorities to repeal all the legislation.

South Africa currently had a good model that worked and was regarded as best practice in Africa. A board or a regulator would face challenges but the unintended consequences of a regulator would have to be examined. She pointed out that WCGRB had proposed the round robin for exceptional circumstances only. There was no doubt that there was a need for discussion in the Policy Council.

Closing Remarks

The Chairperson made the point that the gambling legislation had been spelt out over many administrations.

The purpose of the gambling legislation was not to raise revenue but to regulate gambling. It was to regulate a sector of which many in the faith sector and justice and correctional services had a very different perspective. People in provinces looked at the revenue but had not looked at the other issues and the costs that arose as a result of the gambling. Provinces saw gambling as a critical revenue earner but most people agreed that there could not be a plethora of machines. There had to be a cap on the number of LPMs that were now littering streets and establishments throughout the country.

The Chairperson noted that most presentations acknowledged that there was a challenge with compliance, from Ithuba to submissions on interactive gambling. In 2009, the first Bill to hit her desk in Parliament had been about online gaming. Treasury had stated that it was almost impossible to stop it but one could prevent people from accessing any winnings and that was something that the Committee could look at.

How many regulators of gambling were there, internationally? The Chairperson had asked the Committee Researcher for the information. There was a Danish Commissioner and the UK Gambling Commission while Australia had a federal model. In Mpumalanga, there was already an Economic Regulator. She understood that there was also a type of regulator in Norway. It was not, therefore, a unique model. Provinces should also consider a regulator. Norms and standards would not be taken seriously so that approach would not work.

She thanked Mr Macpherson for initially exposing the Gambling Board for what it was – a first class joyride.

Sun Slots was requested to respond in writing, and bookmakers, and anyone else who wanted to contribute, could do so in writing.

Committee business

The Chairperson informed Members that there had been changes to the Committee Programme necessitated by changes to the parliamentary programme. The new programme would be handed out the following week. On 30 October 2018, DTI would report back on the submissions received on the NGB. Presenters could still send additions before that. She invited the presenters to attend that meeting. On 31 October 2018, the Committee would deal with the Copyright Amendment Bill. 1 November 2018 was the closing date for input on the Performer’s Protection Bill.

Earlier that week, the Chairperson had been informed by the World Intellectual Property Organisation (WIPO) that it was following the Copyright Bill with interest, so Members had to be aware that there was an international spotlight on the Bill.

The Chairperson thanked everyone.

The meeting was adjourned.

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