ATC190320: Report of the Select Committee on Trade and International Relations on the National Gambling Amendment Bill [B 27B – 2018] (National Assembly – sec 76), dated 20 March 2019

Proposal for Amendments

Reasons for Not Accepting Proposals for Amendments

Clause 1 – Definitions

Definition of “cash dispensing machine” should be replaced with the term “automated teller machine” which should then be defined as follows:

“an electromechanical device that permits an authorised user to withdraw cash from an account held with a bank as defined in the Banks Act 94 of 1990, Mutual Banks Act 124 1993 and Co-Operatives Banks Act 40 of 2007.

The definition does not form part of the Amendment Bill

Clause 3: Section 10A –

The section should clarify that the requirements only apply to persons who engage in restricted gambling activities without holding an appropriate licence.

Due to the growing number of illegal operators, and the devastating impact that unregulated gambling can have on the lives of citizens as well as to the economy of the country, it is necessary that the Government takes every available step to combat illegal gambling operations. The provision is thus necessary, to close regulatory gap that may be exploited.

Clause 12: Section 27(1)(a)

The proposed extension of the National Central Electronic Monitoring System (NCEMS) is rejected. There was no sufficient consultation of the extension of NCEMS to other modes of gambling. It must be noted that casinos have their own systems as required by PLAs, which is why there is no need to have a new system when its feasibility and costs have not been established. NCEMS will usurp the competency of the PLAs and decentralization would create economic development for the Province

There was consultation on NCEMS. There is further allowance for consultation in section 27(4)(b) of the Bill. Stakeholders will participate in the implementation of the NCEMS. The NCEMS is a national competency and no province has the authority to have its own centralized monitoring system. The NCEMS is a regulatory tool for NGB and Provincial Gambling Boards (PGBs) to provide independent oversight of the gambling activities, taxes and levies due to Government.

Clause 15(c): Section 33

This provides for insertion of paragraph (l) in section 33 of the principal Act which section only has up to paragraphs (a) to (c). Rectify accordingly.

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This clause provides for the insertion of paragraph (l) in section 33 of the principal Act. However, section 33 contains only paragraphs (a) to (c). It has thus been argued that the reference to paragraph (l) is incorrect. With respect, that is not so. The reason being that the National Gambling Amendment Act, No. 10 of 2008 embodies a substitution of section 33 of the principal Act. This substitution contains paragraphs (a) to (k). The 2008 Amendment Act was assented to and signed by the President and thus enacted. However, it requires a Presidential Proclamation for commencement and such Proclamation has not yet been Gazetted. The Act therefore remains inoperative. Irrespective of the fact that the Act is inoperative, it has the status of law and all amendments contained in the above mentioned Bill must be made consistent with both the principal Act and the 2008 Amendment Act. This clarifies the reference to paragraph (l).

Clause 17 and 22: Section 35 and 57 respectively consider including a provision in section 35 obliging PLAs to access and to have recourse to the shared information when conducting probity investigations of this nature -. “in order to ensure that this section does not remain a dead letter for all practical purposes”.

These suggested amendments do not form part of the amendment Bill. However, the original text in section 35(3) of the National Gambling Act (NGA), 2004 already incorporates the changes being proposed in that there is an existing obligation for National Gambling Bill (NGB) to provide shared information upon request. The Department may need to proclaim the implementation date by way of Regulations so everyone will know how the National Gambling Regulator (NGR) will preserve such probity information for ease of access by PLAs.

Clause 26: Section 63A

Principles of corporate governance must be maintained in terms of meetings of the National Gambling Policy Council (NGPC). Challenges of lack of quorum can be resolved by passing resolutions by way of round robin with a least two thirds of eligible voting members.

Remove the entire clause as it will compromise the extent to which Council’s decisions are discussed and considered, as well as the legitimacy of the decision. The non-attendance on Council members should be addressed in a different form and not be legislated.

The insertion of section 63A is intended to serve as a strict measure and a deterrent against the dysfunctionality of the NGPC. It seeks to encourage that a quorum is indeed achieved. This is also in line with current practices of good corporate governance.

Clause 28, 29 and 30: Section 64(4), 65, 65A and 65B must be deleted,  respectively.

The implication of deleting section 28 and 29 will result in the non-establishment of envisaged NGR in turn the proposed provisions seek to ensure that the NGR is established and will be a public entity in terms of the PFMA, and will comply with all the PFMA legal prescripts and is accountable to the Auditor-General and Parliament.

The CEO of the NGR will be the accounting authority and is required to account at the highest level pertaining to its fiduciary duties. All governance checks and balances are in place in terms of legislation to prevent abuse of power.

The implication of deleting section 30 will amount to the envisaged NGR being without an administrative head or accounting authority. The creation of the NGR with the proposed governance structure will improve internal and external efficiency.

Clause 31: Section 66(6)

Clause 31(e) amends section 66(6) whereas the Act has no sequence of the subsection. This error might  be attributed to the National Gambling Amendment Act 2008 which has not been brought into operation, which has the sequence.

This clause proposes the substitution of section 66(6)(b) of the principal Act. Reference to section 66 of the principal Act makes it clear that this section only embodies 5 subsections. However, section 39 of the National Gambling Amendment Act, 2008, provides for the addition of subsection (6) to section 66 of the principal Act. The reason why subsection (6) is not currently reflected in the principal Act is because the Amendment Act, 2008, has not yet commenced. Nonetheless, by virtue of the fact that the Amendment Act, 2008, was enacted, the Department is obliged to give legal consequence thereto and to reflect its existence as inoperative law in drafting the Bill. Hence the reference to subsection (6) in clause 31(e) of the Bill. It thus follows that the Bill must be reflected upon against the backdrop of the principal Act and the Amendment Act to perceive the whole picture in law.

The 2008 Amendment Act was assented to and signed by the President and thus enacted. However, it requires a Presidential Proclamation for commencement and such Proclamation has not yet been Gazetted. The Act therefore remains inoperative. Irrespective of the fact that the Act is inoperative, it has the status of law and all amendments contained in the above mentioned Bill must be made consistent with both the principal Act and the 2008 Amendment Act.

Clause 32: Section 66A(a)

(a) May enter into agreement with any other organ of state as contemplated in the Constitution, [to provide for the joint exercise or performance of their respective powers and functions contemplated in this Act] to co-ordinate and harmonise the exercise or performance of their respective powers and functions with regard to gambling activities”.

Clause 32’s intention is about coordination and harmonisation between the NGR, PLAs and other applicable institutions. To give effect to this, Memoranda of Understanding (MoUs) will be entered into, which will inform joint efforts and functions for the performance of the agreements. The entire section is about coordination on performance of some functions, and the suggested alternate choice of wording will arrive at the same conclusion. The context and principle is the same. It is suggested the current section be retained as is.

Clause 35

The repealed section 69 must be reinstated to provide for the resignation of the CEO and Deputy CEO.

The resignation or grounds for removal of the CEO or DCEO are subject to ordinary labour relations prescripts in terms of employment law and resignation or ground for removal is already contained in the standard employment contracts. The repealed section 69 refers to the Board members, their resignation, removal from office and vacancies and board members are not deemed to be employees as they were non-executive members of the board the CEO of the NGB is an executive and for all intents and purposes deemed to be an employee. Clause 35 should remain repealed. The resignation and removal of CEO will be provided for in the contract of their appointment. There is no need to legislate for that.

Clause 40: Section 76A1

There must be a provision that will strengthen the capacity of PLA inspectors to investigate illegal gambling activities as it is opined that the national inspectors will result with duplication of roles and costs.

The national inspectors must always be accompanied by PLA inspectors when doing work in the relevant province.

Section 76A ensures that the NGR will be empowered to combat illegal gambling autonomously in addition to the already existing enforcement powers set out in section 77.

The provision will complement rather than undermine the role of PLAs. The key word in the provision is the addition of the words “or without” to prevent the national inspectors from being restricted from performing on the basis of PLA inspectors not being available. For example, the NGR national inspectors will be able to assist the PLA to address investigations pertaining to either the issuance or monitoring of national licences in another province due to jurisdictional limitations. The power to investigate and monitor national licences is in the original text in sections 33 and 42 of the NGA, 2004. The insertion of 76A seeks to close an oversight and regulatory gap with regards to enforcement.