Lotteries Amendment Bill: hearing and finalisation

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Trade, Industry and Competition

25 October 2001
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Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
26 October 2001
LOTTERIES AMENDMENT BILL: HEARING & FINALISATION
 


Chairperson: Dr. Rob Davies (ANC)

Documents handed out:

Lotteries Amendment Bill [B 81-2001]

 

Submission by Association of Marketers
Letter to the Committee from the Direct Marketing Association
Proposed Amendments to the Bill (see Appendix)

SUMMARY
The representative from the Lottery Board took the Committee through two proposed amendments to the Bill. The Association of Marketers raised two concerns. Both concerns were accepted by the Committee and a further two amendments were agreed upon. The Committee formally considered the Bill and it was adopted.

MINUTES
Adv. Kriel (Representative of the Lottery Board) to take the Committee through the proposed amendments to the Bill (see Appendix 1):

Section 54(1)(j)
This amendment relates to a technical error with the wording. Sometimes under the guise of a commercial competition, a lottery is operated. An example is if a ballpoint pen is sold for R100 as a façade to run a lottery. A wording to this clause is therefore proposed to encapsulate what is trying to be achieved i.e. make such facades unlawful.

Section 54(2)(h)
This amendment covers the concern raised by Mr Lockey (ANC). It was not the intention to allow the Minister to simply make regulations at a whim so the clause is omitted. The subclause that substitutes (h) states that the Minister may make regulation on any matter when the conduct of a promotional competition may reasonably have a negative influence on the public.

Association of Marketers (ASOM) submission
Ms Christiane Duval, a director of the Direct Marketing Association (DMA), made the submission on behalf of ASOM. She referred to the letter sent to the Committee by the DMA and confirmed that DMA supported the submission of ASOM.

Ms Duval indicated that ASOM had three proposed changes to the Bill. One of proposals was to 54(1)(j) which had now been adequately amended as dealt with by Adv Kriel. Therefore she would address the other two issues:

Section 54(1)(a)
The insertion of the word "only" may have unintended consequences for promotional competitions that are conducted at the same time in several countries. South Africa has been successful in developing businesses that are global and specifically operate in other African countries. The effect of the word 'only' may make it unlawful for our members (many of whom run such promotional activities) to offer a promotional competition, which is of a cross border nature.

Similarly. international companies, which run such promotional competitions from outside the jurisdiction of this Bill, may be deemed unlawful if they offer South Africans participation in the competition. This practice has become even more prevalent with the emergence of the internet. In any case the Lotteries Act would not have any application in other jurisdictions.

It was suggested that this was not the intention of the drafters of the Bill and ASOM requested that the word 'only' be deleted from the Bill.

Section 54(1)(b)(i)
This section protects the public against unfair increases in the price of goods or services. which are the subject of promotional competitions. ASOM agrees with this provision. However, on a strict interpretation of the law, discounts which often accompany promotional competitions, may also be outlawed.

ASOM suggested that the wording in the Bill be changed to:
'the price usually or ordinarily paid , excluding discounts, for such goods.'

Discussion
The Chair said that the inclusion of the world 'only' had been raised by the Committee before and asked the Advocate for comment.

Adv. Kriel replied that the word 'only' was included at the Committee stage. The thought was that there might be difficulty enforcing the legislation if the word was not included. The Lottery Board did not have any strong feeling about this point and considered it to be a technical change to better give effect to what the section was trying to say.

The Chair said that the difficulty is in the plain language reading of the section because it seemed that if a promotional competition was conducted in SA and elsewhere then it would be illegal. He asked if there were any objections to deleting the word 'only'.

There were no objections and it was agreed that the word be deleted. The Chair said that if the Lottery Board has a problem they would have an opportunity to raise it again.

The second issue raised by ASOM was that section 54(1)(b)(i) might prohibit businesses from offering discounts with promotional competitions. This was a problem because this was usually done.

Mr Lockey (ANC) said that he understood that there is a need to prohibit the sale of goods or services at an increased price as a façade for a lottery. But prohibiting the sale at a discounted price made no sense. It would make it difficult for business because discounts accompanied promotional competitions. What they are trying to prevent is the increased price to disguise a lottery.

Adv. Kriel commented that the words ' the price usually and ordinarily paid' is open for the courts to interpret because it is usual for discounts to be given. If there are usually no discounts for a specific product or service and all of a sudden they have discounts with a promotional competition, then the courts must decide if it is a lottery.

The Chair asked the Committee if there were any objections to the inclusion of the amendment of ASOM. There were none. It was decided that the suggested amendment would be included. If the Lottery Board had any problems it could be taken up at the NCOP stage.

The Motion of Desirability was read and all the members were in favour of the adoption of the Bill. The Bill was reported to the National Assembly with the amendments.

Appendix:
PROPOSED AMENDMENTS TO LOTTERIES AMENDMENT BILL [B81-2001]

CLAUSE I
1. On page 3, from line 12, to omit paragraph (j) and to substitute:

(1) the consideration paid for the purchase of the goods or the use of the services promoted by a promotional competition is not increased by the opportunity to take part in that promotional competition to such an extent that that promotional competition does not mainly serve as a means, method or mechanism of promoting the relevant goods or services, but substantially as consideration for the opportunity to take part in that promotional competition.

2. On page 3, from line 60, to omit paragraph (h) and to substitute:
any matter relating to the conduct of a promotional competition which may reasonably have a negative influence on or consequence for the public or a part or group thereof; and

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