Gambling Amendment Bill: deliberations & voting

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
5 September 2007
GAMBLING AMENDMENT BILL: DELIBERATIONS & VOTING

Chairperson: Mr B Martins (ANC)

Documents handed out:
National Gambling Amendment Bill [B 31-2007] as of 27 July 2007
National Gambling Amendment Bill [B 31A-2007] Portfolio Committee amendments
National Gambling Amendment Bill [B 31B-2007] Portfolio Committee amendments incorporated into Bill
Department of Trade and Industry (DTI) proposed amendments

Audio recording of meeting [Part1]&[Part2]

SUMMARY
The Department discussed some refinements to the proposed amendments to the Gambling Amendment Bill. Committee questions focussed on the conditions for interactive provider licences, which should be substantially similar to those required for land-based gambling institutions. It was suggested that the regulations on this Bill also be referred to the Committee and not only be determined by the Minister.

MINUTES
Mr Fungai Sibanda (Department of Trade and Industry) introduced some refinements to the proposed amendments to the Gambling Amendment Bill. It was proposed that the existing long title be omitted and be substituted with the following:

“To amend the National Gambling Act, 2004, so as to change certain definitions and insert new definitions; to provide for the regulation of interactive gambling so as to protect society against the stimulation of the demand for gambling; to provide for the registration of players and opening of player accounts; to provide for the conditions applicable to interactive gambling licences; to provide for further protection of minors and other persons vulnerable to the negative effects of gambling; and to prevent gambling from being associated with crime, money laundering or financing of terrorist and related activities.”

It was proposed that “terrorist funding” be omitted and substituted with “financing of terrorist and related activities” in Clause 11, page 7, from line 31. This amendment aimed at strengthening provisions related to money laundering.

Provisions for the prevention of organised crime were added to Clause 31, which provided a cross reference with other relevant legislation.

Mr Johan Stydom (Legal Advisor to the Dti) then read through all the amendments to the Act, clause by clause, and members asked question of clarification or proposed changes.

These comments, questions and replies were:

In terms of Clause 1(i), Mr Johan Stydom commented that person to person (P2P) betting was excluded from interactive gambling.

Prof Turok expressed his appreciation to the Dti for including the Portfolio Committee’s recommendations and major objections within amendments.

Clause 4 elaborated on the purpose of the Act, which has a socio-economic nature and specifically made provision for the protection of minors and vulnerable persons.

Clause 7 was amended to allow ministerial power to make regulations regarding specified games.

Prof Turok suggested that the regulations should also be referred to the Committee for information purposes.

Mr Martins suggested that there was a standard formulation which was used in the past and which could also be applied in this case.

Dti agreed that they would follow up on Prof Turok’s suggestion to refer regulations to the Committee in terms of the standard formulation.

Clause 8 was amended to indicate when an interactive gambling transaction started and when it ended.

Clause 9 was amended to explain how a credit provider should ensure that payment-in-kind winnings reached players.

Clause 11 amendments proposed that if money was in a player account, it should not be converted into anything else, such as chips, but should remain money.

Clause 13 provided restrictions on granting credit for interactive gambling. No credit would be allowed to any person for the purposes of engaging in interactive gambling.

Clause 15 stated that no advertising or promotion services would be allowed for interactive gambling. In terms of the principal Act certain forms of gambling could be advertised but for interactive gambling, no advertising was allowed.

Prof Turok and Mr L Labuschagne (DA) suggested that Clause 15 should be stated in a more straightforward although still elegant manner.

Mr Strydom replied that Dti would look at Clause 15 and make it more straightforward.

Clause 17 was amended to provide the Minister the power to prescribe standards for security, access and maintenance of an interactive provider’s website.

Clause 18 was amended to indicate that registers of all licensed interactive gambling websites had to be kept by the National Gambling Board.

Clause 19 was amended to provide the Board with the jurisdiction to exercise their powers with respect to interactive gambling.

Clause 20 outlined the interactive gambling responsibilities of the Board, which included control systems, supervision and review of licences.

Clause 22 was amended to make a clearer distinction between the powers of the Minister and the powers of the Board. The Minister has the overriding power to set guidelines and the Board would attach conditions to interactive service providers.

Prof Turok suggested that the wording of the amendment could be improved and be made clearer.

Mr Strydom indicated that the Dti would try and accommodate Prof Turok’s suggestion.

Mr Maake asked if it was necessary to state that it was a national licence.

Mr Sibanda said that it was important to distinguish between a national and provincial licence. Within Clause 22 it was important to indicate that it was the National Gambling Board who issued the licence.

Clause 23 specified that the Minister may prescribe the maximum number of licences that may be granted in South Africa.

Prof Turok said that Parliament should have a say in the maximum number of licences being granted and not only the Minister. The maximum number was a moral question and Parliament should have an input on this issue.

Dr Rabie asked if it was possible to determine the maximum or minimum number of gambling licences at such an early stage. He felt that there was not adequate information at the moment and that one should wait and see how many people applied for licences.

Mr Sibanda said that currently Dti did not know how many licences would be required. He said that Parliament would be consulted regarding the number of gambling licences.

Mr Labuschagne commented that the conditions of a licence for an interactive provider should be substantially similar to those required for land-based gambling institutions.

Mr Strydom said that the amendments in Clause 22 aimed to make conditions between land-based and interactive operators similar. The Minister would make regulations, which would set out the framework, and the Board would issue licences taking into account the ministerial framework.

Prof Turok said that the Minister had the discretion to make conditions for interactive gambling less onerous and substantially different to those for land-based operators. He suggested that conditions be included in the Bill to ensure that they were substantially similar.

Mr Strydom said that the Minister could not make conditions in isolation but that he had to consult. Regulations had to submitted to Parliament and a period of consultation was also provided for.

Mr Labuschagne said that matters were unnecessarily complicated. He suggested that it be stated that the conditions for interactive gambling should be substantially the same as land-based casinos.
 
Mr Martins asked the Dti to look at Mr Labuschagne’s concern and determine how it could be incorporated in Clause 22.

Mr Maake referred to the mention of “geographical location” of interactive service providers in Clause 23 and asked if this meant that there should be an equal distribution amongst the provinces. Given that interactive gambling was borderless, he asked if the meaning of the amendment was that service providers should not only be located in one specific area.

Mr Sibanda replied that other factors would be taken into consideration, but that geographic considerations could also be taken into account.

Clause 26 and 27 ensured that Provincial Gambling Authorities would have the authority to issue a national licence / an interactive gambling operator licence.

Clause 28 gave the Board the authority to suspend licences and also to amend licences if the need arose.

Prof Turok referred to Clause 30(c) where it stated that the board could issue a national licence with or without conditions. He wanted clarity from Dti, given his understanding that it was the Minister’s authority to determine conditions.

Mr Strydom replied that in the amendments the provincial authority would have the power to attach conditions whereas in Clause 22, which now incorporated Dti’s amendments, it was clear that the minister would do no more than provide the framework or criteria that must be taken into account by the relevant Board in attaching conditions.

Mr Strydom then focussed on Clauses 31 and 32 where amendments were proposed resulting from Treasury’s input. Three separate Acts were referred to in the amendments, which included the Prevention of Organised Crime Act, the Financial Intelligence Centre Act (FICA) and the Protection of Constitutional Democracy against Terrorist and Related Activities Act. The intention was to ensure that gambling was in no way associated with criminal activities.

Clause 34 included certain requirements that have to be met by the websites of interactive service providers.

Clause 35 referred to the probity reports, which should be conducted as prescribed in the Principal Act.

Prof Turok asked why the term ‘competitiveness’ was used in Clause 36. He said that the term gave a certain amount of credibility and legitimacy, which was not required.

Mr Sibanda suggsted that Dti could omit ‘competitiveness’ from the Bill.

Dr Rabie felt that the term ‘competitiveness’ indicated that SA wanted to benchmark itself against other countries and therefore the term might be necessary.

Clause 38 adjusted provisions for offences and penalties in the National Gambling Act.

Clause 39 was amended to delegate certain powers to the Provincial Licensing Authority.

Prof Turok asked if there was any control over the Provincial Licensing Authority.

Mr Sibanda replied that the Provincial Licensing Authorities (PLAs) had their own board members and that there were external auditors who monitored their performance. The National Gambling Board had a duty to evaluate compliance monitoring of the PLAs. PLAs also has to report to the relevant Member of the Executive Council (MEC) of that province.

Mr Strydom explained that the new Clause 42 added an amendment to the Bill to allow for imposing tax on interactive gambling. The amendment was an enabler to provide for the Minister of Finance to introduce the necessary legislation at a later stage.

Voting on the National Gambling Amendment Bill
The Chairperson read the motion of desirability for the Bill and the Committee agreed to approve the Bill including the proposed amendments.

The meeting was adjourned.