National Gambling Amendment Bill: Department of Trade And Industry Response to Negotiating Mandates

NCOP Economic and Business Development

29 January 2008
Chairperson: Ms N Ntwanambi (ANC, Western Cape)
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Meeting Summary

The Department of Trade and Industry presented its response to negotiating mandates that had been received from the provinces on the National Gambling Amendment Bill. The common issues raised by provinces include interactive gambling requirements, registration, licensing and regulation. The contentious issue of whether or not to ban interactive gambling advertisements was still being considered by the Department and the State Law Advisers, in particular whether such a ban was discriminatory as the advertisement of other types of gambling was allowed in the principal Act. The effect of invoking Section 36 of the Constitution, relating to limitation of rights, was considered.

Meeting report

 

National Gambling Amendment Bill: Department of Trade and Industry (dti) responses to comments by provinces
Mr Fungai Sibanda, Acting Deputy Director General, Department of Trade and Industry, presented  dti’s response to comments made by the provinces on the National Gambling Amendment Bill. The response covered comments made by the Eastern Cape, Limpopo, Free State, Northern Cape, Gauteng and North West Provinces. The common issues raised by provinces include interactive gambling requirements, registration, licensing and regulation. The contentious issue of whether or not to ban interactive gambling advertisements was still being considered by dti and the State Law Advisers.

Mr Johan Strydom, Senior Legal Advisor, Department of Trade and Industry, conceded that advertising had been a contentious issue throughout the process. He noted that the initial bill did not contain a prohibition on interactive gambling advertisements. The blanket provision on prohibiting interactive gambling had later been included in the Bill after deliberations in the National Assembly. The principal Act made provision for the advertising of gambling activities, albeit with certain restrictions. Mr Strydom said that that there was a growing sentiment within parliament against gambling. It was felt that there should be a blanket banning of interacting advertising of gambling. Dti, together with the State Law Advisers, had been tasked with considering whether that was legally possible. Mr Strydom explained that the blanket banning of advertising interactive gambling was possible in the same manner in which tobacco advertising had been banned. However the prohibition on advertising tobacco was a general one, whereas the banning of interactive advertising was specific to a certain type of gambling. As previously stated, current legislation allows for the restrictive adverting of gambling. Mr Strydom felt that from a legal point of view the banning of interactive gambling advertisements might be discriminatory as advertising other types of gambling was allowed.

Discussion
The Chairperson said that the bill was not meant only to be applied in urban areas. Internet cafes were opening up in rural areas as well and illegal interactive gambling may well be taking place. She asked what was being done at grassroots level about illegal gambling. She referred to the need for a credit card in order to engage in interactive gambling and said that credit cards were no longer reserved for the rich alone. They were freely available, and the average person could easily be bankrupted by interactive gambling. The Chairperson pointed out that the Bill had been silent around public education. She additionally asked what comments religious organisations had made on the Bill.

Mr Sibanda responded there were cases where illegal gambling operators had been taken to court and that fines had been imposed. He said that the issue was about enforcement and being able to find illegal gambling operators.

Mr Themba Marasha, Chief Operating Officer, National Gambling Board, said that limiting the use of credit cards for interactive gambling was difficult. There were many sectors involved, one of the most prominent being the banking sector. The National Gambling Board had engaged with banks as to whether they would not permit payment of illegal activities by way of credit cards. The difficulty was that illegal operators masked their illegal activities in the guise of legitimate activities over the Internet. It was therefore difficult to identify an illegal activity. The National Gambling Board had undertaken an investigation and was being assisted by the Reserve Bank. Mr Marasha pointed out that Telkom had even been contacted in order to look into the granting of 0800 numbers to illegal operators. He noted that there were many aspects to look into and many situations had been encountered.

He added that public awareness and education had been outsourced to an organisation located in Kenilworth, Cape Town. He said that research done by the Wiehahn Commission had shown that South Africa was in favour of having gambling. Interactive gambling was just an extension of the process of rolling out gambling activities. Mr Marasha said that addiction was a disease that would always exist. Addiction could take the form of drugs, alcohol or gambling. It was up to the individual to admit that he was addicted.

Ms Evelyn Masotya, Director, dti, conceded that there were problem gamblers. The idea was to control the environment and to protect people in terms of the Bill. She also responded that there had been mixed views by religious organisations during the public hearings. The Jewish Board of Deputies, for instance, had raised concerns about structures for education on gambling.

The Chairperson was not convinced that enough was being done on creating awareness on the problems associated with gambling. She said that the organisation in Kenilworth should be doing its job as its efforts were not seen in Cape Town.

Mr Marasha noted these concerns.
 
Mr D Mkono (ANC, Eastern Cape) said that the question that should be asked was whether the Bill was a progressive piece of legislation. He said that in many ways it was an immoral piece of legislation. Mr Mkono said that it might be perceived that the Minister was given unfettered powers to issue regulations. Members and MECs in the provinces had concerns about practical consultation taking place on the ground. It was felt that there was a need to intensify measures around credit control.

Adv Tlotliso Polaki Legal Advisor, National Gambling Board, responded that provinces licensed all other forms of gambling. There was thus indeed a delegation of authority by the Minister.
 
Mr D Gamede (ANC, KZN) stated that gambling was like any other business. The bottom line was geared to maximizing profits. He felt that the legalisation of interactive gambling and taxation thereof were two issues that should run parallel to one another. Mr Gamede said that prohibiting the advertising of interactive gambling would be discriminatory and that it was rather necessary to look at how best it could be controlled.

Ms Masotya said that taxation of gambling was considered not to be in the jurisdiction of dti, but the process was nevertheless ongoing. 

Mr J Sibiya (ANC, Limpopo) referred to the Department’s self test that an individual could take in order to determine whether he was in fact addicted to gambling. He asked whether the individual would in the first instance be truthful about answers to the test, as many addicts were in denial. Mr Sibiya said that gambling was a problem in the provinces and that people were even using grant monies to place bets. He noted that the problem would be addressed when the Minister drew up a Monitoring and Assessment Framework, but the question must be asked as to what would be done by dti in the interim.

Ms Masotya stated that the use of grant monies for gambling activities was a general problem. She felt that people needed to educate themselves. Banning interactive gambling was considered not to be the solution. The idea should be on how best to control it.

Ms Polaki said that a new gambling Act was not being introduced. Efforts were being concentrated on putting measures in place to best control interactive gambling.

A Member strongly felt that gambling was affecting the poorest of the poor. He pointed out that advertising gambling was not only about seeing the odd billboard along the road. It would find its way to sponsoring schools or sporting events, and various aspects of every day life. He said that interactive active gambling was currently being glamorised but he could foresee it becoming a major problem.

An ANC representative from Gauteng said that it was generally felt that advertising gambling would have a negative impact on society, in the same way that many felt that advertising alcohol also had a negative impact. He said that the reality however was that both were part and parcel of South African society. It was felt that the Regulator should control the environment within which gambling was allowed. He said that the banning of advertising on interactive gambling could not take place whilst the advertising of other types of gambling was still allowed. There was a need for the Regulator to set up strict measures for the regulation of all types of gambling. Initially Gauteng Province had supported the idea that a provincial regulator would have been better suited to regulate at provincial level. It now accepted that gambling would be regulated nationally by the National Gambling Board.

The Chairperson was glad that Gauteng accepted the fact that regulation would take place nationally but said that there would be spin-off benefits to the provinces as well.

Mr Mkono asked whether there were concerns over a constitutional challenge to the banning of advertising interactive gambling.

Mr Strydom said that the essence was that the advertising of other forms of gambling was a vested right guaranteed by the principal Act. The gambling industry had invested huge amounts of money on advertising. The idea was to be fair and equitable. Mr Strydom noted that perhaps an overall prohibition on gambling advertising should be considered as opposed to discriminating only on certain types of gambling activities. He hoped to have a policy stance on the matter the next time the Department met with the Committee. He noted that the State Law Advisers’ Office did not have a problem with the formulation as it was currently set out in the Bill. Mr Strydom however noted that if perhaps there was insistence on the banning of advertising of interactive gambling, Section 36 of the Constitution could be invoked. This provided for the limitation of rights where the circumstances were reasonable and justifiable.

The Chairperson asked Mr Strydom to provide the Committee with a possible formulation within a week’s time. She also asked if any further amendments to the principal Act were foreseen in the near future.

Mr Strydom agreed to provide the committee with a possible formulation.

Mr Sibanda said that no further amendments were being considered at the moment.

Adoption of Committee Programme
The Committee proceeded to adopt its programme for the term.

The meeting was adjourned.

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