National Gambling Bill: hearings; Response by the Minister of Trade and Industry

Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
22 September 2003
NATIONAL GAMBLING BILL: HEARINGS; RESPONSE BY THE MINISTER OF TRADE AND INDUSTRY
 

Chairperson: Dr R Davies (ANC)

Relevant documents:
SA Police Services submission (see Appendix)
 

Response by the Minister of Trade and Industry, Alec Erwin, to the Joint Public Hearings
National Gambling Bill [B48-2003]
National Gambling Bill [B48B-2003]

Other documents handed out:
Casino Association of South Africa, 20 September 2003: Additional Submission
Limited Payout Machine Association of South Africa submission, 22 September

SUMMARY
The SA Police Services was the last organisation to make a submission regarding the Bill. After this submission was discussed, the Minister of Trade and Industry responded to the public hearings. The Minister explained why his stance on Limited Payout Machines (LPMs) was more accommodating than the anti-LPM Committee Members had hoped. The Minister also addressed 6-hour casino closures, Internet gambling and the National Central Electronic Monitoring System.

MINUTES
SOUTH AFRICAN POLICE SERVICE (SAPS) SUBMISSION
Assistant Commissioner T Geldenhuys, Head of SAPS Legal Services, said the Police did not foresee major problems with the implementation of the provisions in the National Gambling Bill. He made redrafting suggestions in terms of definitions, the legal status of unlicensed machines, registration of prescribed gambling devices, LPMs, national licensing procedures, and the National Gambling Policy Council. He also requested that the role of the SAPS in clauses 32 and 63 be more clearly defined. He raised some issues related to the role of the National Inspectorate.

Discussion
Mr D Lockey (ANC) said that he had learned from discussions with police officers that the Provincial Gambling Act was not police-friendly. He had also heard that illegal gambling had become very sophisticated and often cash free, and thus difficult to prove.

Ms J Moloi (ANC) asked how the SAPS envisaged the outcome of the rollout of LPMs, specifically in terms of monitoring, law enforcement and socio-economics.

The Chair wanted to know whether Asst Comm Geldenhuys thought the Bill's provisions for interactive gambling were sufficient to cover Internet gambling.

Asst Comm Geldenhuys said Mr Lockey accurately described the difficulties police officials faced. The SAPS would prefer very clear provisions about its role in terms of the Bill. The SAPS wanted forfeiture rights to be included in order to confiscate the material gains of illegal gambling operations. They foresaw the same problems with LPMs as with conventional gambling devices. If there was a great proliferation of LPMs, they would become difficult to police due to sheer numbers. There were specific policing difficulties related to the Internet, because someone in South Africa could, for instance, create a gambling website on a server in the United Kingdom and then use it to conduct illegal gambling locally. The Bill should facilitate the prosecution of people who gambled on such a website. To make the socio-economic impact of gambling and the LPM industry less severe, Asst Comm Geldenhuys suggested campaigns aimed at schools to teach the youth how gambling should be properly done. The National Gambling Board should also consider launching educational programmes in the press and on radio and television.

RESPONSE BY MINISTER ALEC ERWIN TO THE PUBLIC HEARINGS
The Minister of Trade and Industry, Mr Alec Erwin, focussing on why a new Bill was required and what the consultation process entailed. Regarding policy matters, the Minister said three main issues have emerged: Concerns about the measures to combat addictive and problem gambling; the need to limit gambling opportunities and LPMs in particular; and the treatment of the Horseracing Industry in the Bill. He listed the proposed changes to measures intended to combat addictive/problem gambling. The Minister said Government wanted to delete references to the Horseracing Authority from the Bill, and intended to draft additional provisions for the horseracing industry at a later stage by way of amendment to the Bill. Government did not want to increase the number of casinos or LPMs permitted. The envisaged maximum number of LPMs of 50 000 was possibly too high. The Minister also clarified Government's position regarding the National Central Electronic Monitoring System, saying that although a national system was necessary, it should not limit the capacity of provinces to exercise their rights and responsibilities.

Discussion
Mr Lockey (ANC) said he was convinced that the LPM industry would negatively impact on the ANC's efforts to push back poverty. LPMs would advance the interests of existing roleplayers in the gambling industry and they only enriched a limited number of black people. He urged the Minister to omit all provisions relating to LPMs.

Prof S Ripinga (ANC) said the arguments linking LPMs to black economic empowerment (BEE) were not justified. There had to be better ways of promoting BEE.

The Chair said figures were presented to the Committee indicating that if 50 000 LPMs were to be rolled out. This would translate into between R3.1 and R3.5 billion from the public's pocket going into LPMs every year. What did the Minister think the impact would be on the public's general spending ability, even if the number of LPMs was reduced? The Chair mentioned that, in the wake of Committee members' stance against LPMs, the LPM industry had indicated that it would settle for a rollout of 30 000 machines instead of 50 000 (attached document). Other issues also needed to be addressed - the provision of transport to casinos, the types of advertising allowed and tighter control over free gambling vouchers.

Mr C Lowe (DA) argued that it would be unfair to just shut down the LPM industry. If well run, it could provide considerable opportunities for BEE. Regarding the National Central Electronic Monitoring System, Mr Lowe wanted to know whether the Minister was proposing a dual system (national and provincial) or just a national system.

The Minister responded that LPMs need to be restricted, monitored and controlled. It would be unfair on poorer provinces and generally wasteful to have separate monitoring systems for separate provinces. Prohibition of LPMs did not mean that the figures the Chair quoted would not be spent on gambling. The Minister welcomed the Limited Payout Machine Association's willingness to restrict the number of LPMs to 30 000. Regarding advertising, he said he hoped the industry would work with Government to come up with better controls. There had to be efforts to ensure that the poor were not the target market.

Dr T Rhoda (NNP) enquired about the Minister's position regarding the proposed 6-hour closures for casinos. He said the Committee heard this could lead to job losses and the closure of marginal casinos.

Ms C September (ANC) asked what the Minister proposed should happen to the horse racing industry during the interim? She thought the Minister was going to do more to curb LPMs. Would Government eventually consider phasing out LPMs?

Ms M Ntuli (ANC) said she was concerned about gambling's impact on social welfare. A domestic worker, for instance, could earn R600 per month and gamble most of it away, while children or elderly in her care suffered. Social grants were even being used for gambling. For some, the gambling industry only meant profits, while for others it only brought suffering.

Mr Lockey (ANC) pointed out that the poorest 40% of society was now 20% more impoverished than 10 years ago. Could the country really afford having LPMs in taverns that were frequented by people with such dire needs? It was time to pull the breaks on gambling in South Africa. LPMs would target the poor and their breadwinners. The aim of LPMs was not recreational, but to suck out the last blood left in communities.

Mr Lowe (DA) insisted that a measured approach to LPMs would be best. He asked whether the Minister could provide a timeframe for the possible introduction of measures dealing with horse racing and Internet gambling.

The Minister said the 6-hour closures would be withdrawn because they created too many disruptions. Horseracing and Internet gambling would hopefully be dealt with in the course of 2004. He said Committee members' concerns about LPMs did not persuade him to withdraw the provisions for LPMs. Large numbers of people from all social strata gambled. South Africa's high gambling figures were related to the country's income disparities - the very rich were spending lots of money on gambling. Banning LPMs would create a lot of poor criminals and endless policing requirements. Government created legitimate economic expectations in the LPM sector and might be taken to court if it reneged on its undertakings. Provinces would be the first to get sued since they - and not Parliament - issued licenses. The Minister said his refusal to withdraw the LPM provisions did not mean he was in favour of the industry. He simply did not believe that prohibition would be the best path.

The Chair said the latest communication received from the Casino Association of SA contained proposals that credit should not be granted to gamblers. The Chair concluded the proceedings by saying the next meeting would be a deliberation of the Bill by Committee members and representatives of the Department of Trade and Industry.

The meeting was adjourned.

Appendix
SOUTH AFRICAN POLICE SERVICEThe telephonic conversation between Ms ML Mahlala from your office and Adv. A Brink from our office dated 2003-07-31, refers.

 

RE: COMMENTS ON THE DRAFT NATIONAL GAMBLING BILL,2003

1.

2.

During the recent submission of the draft National Gambling Bill to Cabinet for approval , it was indicated that the Bill will be published for public comments . Ms Mahlala indicated during the above-mentioned conversation that the Bill is yet to be finalized for publication for public comments that we may therefore submit our comments to your office.

3.

The South African Police Service does not foresee major problems with the implementation of the provisions of the National Gambling Bill. However, there are certain issues which the Service would like to bring to your attention:

3.1 CLAUSE 1 Definitions

(a) "gambling game/gambling activity"

It is suggested that clause 3 and clause 5 be reworded to ensure that the activities referred to in these clauses, include a reference to "internet gambling". Internet gambling should therefore be specially included and it should constitute an offence where a person involves himself or herself in any of the defined activities, and in the cases of internet gambling , irrespective of where the server is situated

(b) "inspector"

It is recommended that the definition be amended to include a reference to a police official to enable a member of the Service to exercise the powers and functions of an inspector for purposes of the investigation of a crime. The exclusion of members of the South African Police Service has the effect that a member of the Service does not have any specific investigative powers relating to offences in terms of this Bill.

3.2 CLAUSE 9 (1) Unlicensed machines and devices unlawful

It is suggested that the clause be amended to prohibit a person from transporting any gambling device over provincial borders unless that person is authorized to do so in terms of this Act or applicable provincial legislation.

3.3 CLAUSE 20 Registration of prescribed gambling devices

3.3.1 Clause 20 (1) (a)

3.3.2 Clause 20 (1) (d)

It is suggested that provisions of subclauses 1(a) and (d) should be linked to a specific time frame

( e.g. One calendar month ) within which the same needs to be done and submitted.

3.4 CLAUSE 21 - Gambling machines and devices to be registered

3.4.1 Clause 21(1)(b)

It is suggested that there should be a prescribed time frame linked to the duties as set out in subclause (1) (b)

3.4.2.Clause 21 (3) (b)

It is suggested that there should be a prescribed time frame linked to the duties as set out in subclause (3) (b)

3.4.3. Clause 21(7)

It is suggested that time frame be linked to subclause (1) (d) e.g. 30 days

3.5 Clause 25- Calibration and certification of prescribed gambling devices

It is suggested that a time frame be linked to subclause(1) (d) e.g. 30 days

3.6 Clause 26 -Limited Payout machines

It is suggested that the said duties be linked to a time frame e.g. that it be done on a three monthly basis , calculated from the end of the month of registration

3.7 Clause 42 - National Licensing procedures

It is suggested that the notification referred to in clause 42 (1) (a) be required to be done within a specific time period

3.8 Clause 58(2) - National Gambling Policy Council

It is suggested that a provincial representative of the South African Police Service be included in the supplementary non-voting members.

3.9 Clause 32 and 63

It is suggested that the role of the South African Police Service be more clearly defined in both these clauses.

3.10 Clause 73 - National inspectorate

Clause 73 (3) determines that , for purposes of this Bill or any other national or provincial legislation in respect of gambling and associated activities , an inspector is deemed to have been appointed a peace officer for purposes of sections 40, 41, 45,46 , 47 48, 49 and 50 of the Criminal Procedure Act , 1977 ( Act No. 51 of 1977) . The reference to section 47 should however be deleted since this specific section grants the power to call upon private persons to assist a police official to arrest another person and not to a peace officer.

3.11 General Comments

3.11.1 The phrase "a person must not" is used throughout the text of the Bill, e.g. clause 7,8,9,10 etc. This phrase should rather be substituted with the phrase "a person may not" which is the normal format of drafting a prohibition.

3.11.2. The Bill confers a number of general powers on inspectors, many of which can also be found in the Criminal Procedure Act ,1977(Act No.51 of 1977). The manner in which these powers are set out in the draft Bill possibly expose your Department to litigation . I is suggested that the provisions of the Criminal Procedure Act , 1977 , should rather be incorporated than be redrafted into a Bill .

3.11.3. The reference to a "police officer" in clause 74(3) should be replaced with a reference to a "police official" . A police officer is a person with a commissioned rank of captain or higher.

3.11.4. In respect of application for all licenses ( but especially for route and site operator's licenses) the Bill should be amended to include a requirement that any applicant who applies for a license must declare , whether the applicant or his or her employees or nominees have previously been convicted of any gambling offence and whether the proposed premises were at any stage , utilized for any gambling offence.

4. In the light of the above -mentioned comments this office will appreciate it if a meeting could be arranged with the relevant officials from your office to discuss the comments set out above.

Kind regards

ASSISTANCE COMM T GELDENHUYS

HEAD : LEGAL SERVICES

LEGISLATION SOUTH AFRICAN POLICE SERVICES

It is suggested that licensing authority be required to keep a register of all gambling devices destroyed and exported within a province.