National Gambling Amendment Bill: consideration

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Trade and Industry

20 November 2018
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Department of Trade and Industry briefed the Committee on the changes made to the National Gambling Amendment Bill following the deliberations in the Committee and the consideration of public comments. Some editorial corrections had also been made.

The Department had included issues relating to the quorum and how decisions could be taken at a second meeting of the National Gambling Policy Council, the Chief Executive Officer and Deputy Chief Executive Officer, as well as the dissolution of the board. Consequent to those changes, there would be changes throughout the Bill.

Section 11(a) was a new subsection that referred to unlawful gambling operators who had to be registered in the Unlawful Gambling Register and which prevented an unlawful gambling operator from obtaining a licence for a period of five years. The clause contained other modalities about unlawful operators.

All gambling operators were required to remove an excluded person from their mailing lists. Issues of forfeiture which had previously been referred to the courts, and which had proved to be an expensive exercise, would be dealt with using the Promotion of Administrative Justice Act. Minors would forfeit their winnings, even when the case came up after the minor attained majority. The intention was to discourage minors from engaging in gambling.

The main amendments in the Bill related to the National Central Electronic Monitoring System and the National Gambling Regulator. Clause 12 was a significant amendment because it introduced the National Central Electronic Monitoring System. Previously only limited pay-out machines were monitored. The system would electronically monitor all casino, bingo and betting activities, including limited pay-out machines. Any future machines or devices would be covered by the Bill. The section also dealt with the role of monitoring and the collecting of fees. Subsection (3) allowed the Minister, after consultation with the National Gambling Policy Council, to determine the extent of the monitoring system.

The establishment and the re-positioning of the National Gambling Regulator was one of the key amendments in the Bill and it was an important issue for the Department of Trade and Industry because it addressed a corporate governance issue and created the National Gambling Regulator as a public entity and juristic person aligned to the Public Finance Management Act and governed by a Chief Executive Officer.

The Chairperson queried whether there was a repetition of the functions of the National Gambling Regulator, as contained in the principal Act, and those listed in the Bill. Even after a brief consultation with the legal advisors, the Department could not provide clarity and the Chairperson requested that the technical team take the Bill away and check for repetition and any other corrections. The team was instructed to return the following day with a clean National Amendment Gambling Bill for the clause-by-clause reading.  The imminent deadline (27 November 2018) to table the Bill in time for a reading in the National Assembly chamber was a concern.

Meeting report

Opening remarks
The Chairperson opened the meeting, acknowledging that the delayed start had been as a result of a more exhaustive meeting with the delegation from the Federal Republic of Germany.

The Chairperson noted apologies and welcomed everyone from the Department of Trade and Industry, the representatives of the National Gambling Board and the legal advisors. She asked the Deputy Director-General (DDG) from the Department to begin immediately with her presentation on the last amendments to the National Gambling Amendment Bill so that the Committee could commence with the clause-by-clause reading of the Bill.

Consideration of the National Gambling Amendment Bill
Dr Evelyn Masotja, DDG: Consumer and Corporate Affairs Division, DTI, informed the Committee that she would go through the changes made to the Bill following the deliberations in the Committee and the consideration of public comments. Some editorial corrections had also been made.

Preamble
A number of insertions had been made in the preamble. DTI had included issues relating to the quorum and how decisions could be taken at a second meeting of the National Gambling Policy Council, the Chief Executive Officer (CEO) and Deputy CEO, as well as the dissolution of the board. Consequent to those changes, there would be changes throughout the Bill.

Clause 1
The definition of a “significant event” had been added. It explained a ‘significant event’ as one that: “means a condition which makes a game unplayable or affects the outcomes of a gambling activity and is recorded in a gambling device.” The reference to a significant event was in Clause 12 section 27(1) of the Bill.

Clause 2
Section 10: Consequential amendment.
 
Clause 3 Register of unlawful gambling operators
Section 10A was a new section that referred to unlawful gambling operators who had to be registered in the Unlawful Gambling Register, and which prevented an unlawful gambling operator from obtaining a licence a period of five years. Any gambling operator wrongfully listed in the Gambling Register could motivate for removal from the register.

Section 11(a) was a new section that referred to unlawful gambling operators, that they had to be registered in the Unlawful Gambling Register and which prevented an unlawful gambling operator from obtaining a licence a period of five years. Any gambling operator wrongfully listed in the Gambling Register could motivate for removal from the register and other modalities about unlawful operators.

Clause 4 Section 14: Excluded Persons
Section 14 was about problem gamblers who were excluded from participation in gambling activities. The section was already in the Act; the amendment related to the change of board to regulator. Subsection (13) also required all gambling operators to remove an excluded person from their mailing lists as soon as they were informed that the person was an excluded person with a problem gambling issue. Those persons could not be sent any marketing-related information.

Clause 5
The clause was about the enforceability of gambling debts and forfeiture of winnings. The issue was the removal of the board and the inclusion of the NGR. In the principal Act, issues of forfeiture had been referred to the courts, which had proved to be an expensive exercise. The amendment dealt with forfeiture via the Promotion of Administrative Justice Act.

An addition to section 4 (ii) was that minors would forfeit their winnings even if, since the date of winning, the minor had attained majority. The intention was to discourage minors from engaging in gambling. Any funds forfeited would go to the NGR to support its fight against unlawful gambling. It had been a recommendation
by the Casino Association of South Africa. In respect of the forfeiture, the Promotion of Administrative Justice Act had replaced the courts.

Clause 6
Correction of the subsection that referred to Limited Pay-out Machines.

Clauses 7, 8, 9, 10,11
Consequential amendments

Clause 12
Clause 12 was a bigger amendment because it referred to the significant event and introduced the National Central Electronic Monitoring System (NCEMS) which provided the date for the expansion of NCEMS from applying only to Limited Pay-out Machines, to also including casino, bingo and betting activities. The section also dealt with the role of monitoring and the collecting of fees. Subsection (3) allowed the Minister, after consultation with the National Gambling Policy Council, to determine the extent of the NCEMS.

Clause 13 and 14
Consequential amendments, mostly, relating to the change from the board to the NGR.

Clause 15
Clause 15 looked at the responsibilities of the board and paragraph (l) added the responsibility to consider applications to the provincial Licensing Authorities for acquisition of Limited Pay-Out Machines for purposes of checking compliance with the approved criteria.

Clause 16
Clause 16 was about the oversight function of the board but with the consequential amendments to the NGR. Subsection(3)(a) strengthened the oversight role of the Regulator.

Clause 17 – had been omitted
Section 35 had been, unintentionally, omitted from the Bill when it was advertised for public comment and was being re-inserted in the Bill.

Clause 18, 19, 20
Consequential amendments.

Clause 21
Clause 21 dealt with the suspension of national licences.

Clause 22, 23, 24
Consequential amendments.

Clause 24
Section 62(b) added that policy and legislation had to come to the Council to ensure alignment.

Clause 25
Consequential amendment.

Clause 26
Clause 26 omitted the need for a quorum in a second meeting.
Dr Masotja noted that the word ‘less’ was used to refer to the number of people. Although ‘fewer’ would be more appropriate grammatically. “less” was the word used in drafting language.

Clause 27, 28, 29
The establishment and the re-positioning of the National Gambling Regulator (NGR) was one of the key amendments in the Bill and it was an important issue for DTI because it addressed a corporate governance issue and created the NGR as a public entity, a juristic person, aligned to the Public Finance Management Act and governed by a CEO. Section 4 (e) to (o) were added functions of the NGR.

Clause 30
The clause looked at the CEO and Deputy CEO regarding terms of office, appointments and eligibility criteria.

Clause 30 section 65b addressed the functions of CEO.

Clause 31
Consequential amendment.

Clause 32
Section 66A related to inter-governmental relations in relation to gambling activities. The NGR would take on the responsibility for international agreements, replacing the Department.

Clause 34
The clause dealt conflicts of interest between the CEO and the staff and how such situations had to be handled.

Clause 35
The clause repealed the sections dealing with the board.

Clause 36
Clause 36 dealt with the consultations by the relevant Ministers regarding the appointment and capacitation of the Regulator.

Clause 37
The clause dealt with the funding of the NGR. Consequential.

Clause 38
Consequential and about capacitation.

Dr Masotja emphasised that section 65(c) had been removed.

Clause 39
Consequential amendment.

Clause 40
Dr Masotja highlighted the issue of the inspectorate. It was not an addition. It had been in the original Act.

Clause 42 
Section 87 (fA) had been added and contained the criteria to allow for the NGR to approve limited pay-out machines (LPMs) in excess of five to ensure consultation and concurrency. The NGR did not approve the machines but ensured that the provinces consulted and created concurrency.

Clause 44
The clause addressed transitional arrangements.

Dr Masotja then highlighted various clauses to which she wished to draw the Committee’s attention.

The forfeiture of unlawful winnings in clause 5 was subject to a policy principle in which the funds from unlawful winnings would go to the NGR to empower it to address issues of illegal gambling. The funds would no longer go to National Treasury.

Clause 30
In response to the public submissions, Clause 30 section 65A(1)  had been amended from the Minister ‘may’ to the Minister ‘must’.

Section 65A (3)(g) A number of Acts had been added: Prevention of Organised Crime Act, 1998 (Act 121 of 1998), the Prevention and Combating of Corrupt Activities Act, 2004 (Act 12 of 2004) and the Financial Intelligence Centre Act 2001 (Act 38 of 2001).

Section 65A(4) was an addition: “The Minister must, in consultation with the Minister of Finance, determine the remuneration, allowances, employment benefits and other terms and conditions of appointment of the Chief Executive Officer.”

Section 65A(5)(g) had been amended because it had suggested that there could be more than  Deputy CEO: “The Minister must appoint a suitably qualified person who satisfies requirements in terms of subsections (2) and (3) as Deputy Chief Executive Officer to assist the Chief Executive Officer in carrying out the functions of the National Gambling Regulator.”.

Section 65B(3)B: the word ‘assign’ functions had been replace with the word ‘delegate’ because ‘assign’ could have other implications.

Dr Masotja stated that those had been the main amendments based on the Committee views and public input.

The National Gambling Amendment Bill – clause by clause reading
Mr B Radebe (ANC) referred to the insertion of ‘unlawful’. Would the insertion not have to be advertised?

Dr Masotja explained that it was not an addition to the Bill. It had already been in the Bill but had been moved to a more appropriate position in the Bill.

The Chairperson asked the DDG whether there was a repetition of the functions of the NGR as stated in the principal Act and then repeated in the Bill in Section 65.

The DDG stated that she could not state immediately if that was the case. She would have to check.

The Chairperson allowed a five-minute break for the DDG to consult the legal advisors.  However, the DDG and the legal advisors were unable to resolve the matter immediately.

The Chairperson requested the DTI to clean up the Bill and then bring it back to the Committee the following day.

Dr Masotja agreed to do so.

The Chairperson then took general questions.

Discussion
Ms L Theko (ANC) said that the Committee needed clarification on the use of the word “less” as explained by Dr Masotja.

Dr Masotja explained that in discussing the number of people present in the Council, the Bill referred to “less” people. She had just explained that less was used in drafting language although it would be grammatically correct to say “fewer”.

The Chairperson noted that drafting language had to be made simple. Even the Constitutional Court had said so. In the past, when she had started in the Gauteng legislature, Latin had been prevalent in the law. She stated that people should not allow lawyers to define language.

Mr D Macpherson (DA) referred to unlawful winnings. He asked whether operators should not be blacklisted for paying out unlawful winnings. He asked whether section 68 applied to the children of appointees.
Referring to conflicts of interest, he suggested that anyone who had a shareholding, etc. would have to dispose of it before accepting a position as the CEO or Deputy CEO of the NGR.

Mr S Mbuyane (ANC) stated that he had understood the agenda to indicate the clause-by-clause reading of the National Gambling Act and the DTI could not come to the Committee with new sections that they wanted to insert. It was a challenge to address changes at the same time as the Committee was supposed to be doing the clause-by-clause reading.

Mr Mbuyane asked whether provincial licence disputes had been addressed. Public submissions had also said that the National Lottery Commission had had to take bookmakers to court. He did not see any reference to concurrence. 

The Chairperson stated that the day had given the Committee time to dust off the Bill and the technical team would pick up anything else that was not finalised before returning the following day.

Mr Radebe informed the Chairperson that the Committee was anxious about deadlines. The Bill had to get to the National Assembly chamber and then be dealt with by the National Council of Provinces before the end of the term of office for the Fifth Parliament. He stressed that the DTI could not add new things when they presented the Bill the following day.

The Chairperson agreed that the Committee would go clause-by-clause the following day.

Mr Macpherson asked the Chairperson whether the DDG would be responding to the questions raised by the Members.

The Chairperson asked the DDG to clarify the point for Mr Macpherson.

The DDG promised that there would be no additions the following day. The technical team needed time to check issues raised by the Chairperson. If anything, the result of the possible repetition would be an omission. There would definitely be no further additions. She told Mr Macpherson that lotteries and gambling had different jurisdictions. The Lottery operators had not been included in the Bill. They could be dealt with in the more comprehensive legislation that would be introduced in the new Parliament.

The DDG agreed with Mr Mbuyane that there was a court case regarding bookmakers. The National Lottery Commission was addressing the issue differently. The bookmakers’ issue had been taken out of the Bill.
She informed Mr Macpherson that to “dispose of interests” might require the Committee to advertise the clause but she would check with the legal advisors.

Closing remarks
The Chairperson stated that the intention had been to go clause by clause but that would have been to ride roughshod over issues that had to be addressed, and it would be unconstitutional. The Committee would conduct the clause-by-clause reading at 9:00 the following morning.

The meeting was adjourned.

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