BRIEFING TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY THE NATIONAL GAMBLING AMENDMENT BILL - 12 September 2018
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BRIEFING TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY
-
THE NATIONAL GAMBLING AMENDMENT BILL
12 September 2018
1
To brief the Portfolio Committee on Trade and
Industry on the National Gambling Amendment Bill,
2018 as introduced in Parliament.
2
• Background
• Definitions
• Gambling statistics
• Illegal gambling
• Unlawful winnings
• Key Challenges in the gambling industry
• Proposed provisions
3
Wiehahn Commission
recommended strict
regulation of gambling, 1995
The National Gambling
Gambling Review Amendment Bill, 2018 is National Gambling Act,
Commission Report, 1996 is passed
2010 recommending now introduced in introducing the National
policy reforms. Parliament after extensive Gambling Board
consultation with the
public and immediate
stakeholders.
2004 National Gambling Act
National Gambling
amends 1996 Act introducing
Amendment Act, 2008
the National Gambling Policy
passed to regulate
Council to ensure policy
interactive gambling. Act is
alignment at national and
not promulgated
provincial government.
4
• 15 May 2015 the dti published the National Gambling Policy for broader public
consultation.
• Written submissions were received, direct engagement with immediate stakeholders and
consultative workshops were conducted until September 2015.
• The National Gambling Policy was approved by Cabinet on 17 February 2016 and the
National Gambling Amendment Bill was drafted pursuant to the approved National
Gambling Policy, 2016.
• 30 September 2016 the National Gambling Amendment Bill was published for broader
public consultation for 45 days and direct engagements with stakeholders and the public
were conducted until early 2017.
• The final Bill was submitted to the Office of the Chief State Law Advisor and later to
Cabinet and approved with necessary changes as shall be reflected below.
• The Bill was approved by Cabinet on 4 July 2018 and introduced into Parliament on 21
August 2018.
5Bingo Bingo means a game played in whole or in part by electronic means that is played using
cards or other devices; that are divided into spaces each of which bears a different
number, picture or symbol; and which are arranged randomly such that each card or
similar device contains a unique set of numbers, pictures or symbols; in which an
operator calls or displays a series of numbers, pictures or symbols in random order and
the players match each such number, picture or symbol on the card or device as it is
called or displayed; and the player who is first to match all the spaces on the card or
device, or who matches a specified set of numbers, pictures or symbols on the card or
device, wins a prize.
Bookmaker A bookmaker, bookie or turf accountant is a person or organisation that takes bets on various
events or contingencies such as horse racing, football, rugby union or marriages, births,
names, divorces and even in extreme cases deaths etc. at agreed upon odds (fixed odds). A
bookmaker may be licensed to operate on or off-course, that is at licensed premises, other
than a race course.
Totalisator / Pari- Totalisator is the name for the automated pool betting system which runs pari-mutuel betting,
Mutuel betting calculating payoff odds, displaying them, and producing tickets based on incoming bets.
used Parimutuel betting is a betting system in which all bets of a particular type are placed
interchangeably together in a pool; taxes and the "house-take" are removed, and payoff odds are calculated
by sharing the net pool among all winning bets.
6FY2016/17 FY2017/18
Variable
Total Total
National gambling statistics:
Turnover R 372 987 955 104 R 389 799 128 064
National gambling statistics:
GGR R 26 958 161 784 R 28 763 259 881
National gambling statistics:
Taxes/levies R 2 743 112 930 R 2 898 984 519
78
Total: R 28 763 259 881
9FY2016/17 FY2017/18
Variable
As at 31 Mar 17 As at 31 Mar 18
Number of operational casinos 38 38
Number of operational slots (casinos) 23 697 25 195
Number of operational tables (casinos) 907 976
Number of operational gambling positions
33 249 35 929
(casinos)
Operational totalisator outlets 456 382
Operational bookmakers 266 284
Operational bookmaker outlets 515 542
Operational Limited Payout Machine (LPM) site
operators 2 188 2 211
Operational LPMs 11 502 11 896
Operational bingo outlets 37 50
Operational bingo positions
6 497 8 520 1011
MAXIMUM
Eastern Northern Western
NUMBER OF Free State Gauteng KZN Limpopo Mpumalanga North West*
Cape Cape Cape
LICENCES
Maximum number 5 4 7 5 3 4 4 active 3 5
of casino licenses
1 pending
Maximum number 2 2 5 4 No set Unlimited, No set No set 2
of route operator maximum maximum maximum
licences number number number Unlimited
Maximum number Unlimited No set 128 51 No set Unlimited, subject No set No set 44
of bookmaker maximum maximum to sufficient maximum maximum
licenses number number market demand number number Unlimited
and operational
viability
Maximum number Unlimited No set 1 2 No set Unlimited, subject No set No set 1
of totalisator maximum maximum to sufficient maximum maximum
licenses number number market demand number number Unlimited
and operational
viability
Maximum number 15 No set 11 21 No set Unlimited, subject 9 No set No roll out
of bingo licenses maximum maximum to sufficient maximum currently
number number market demand number
and operational Unlimited
viability
The Minister of Trade and Industry, Dr Rob Davies increased the maximum number of casino licences that may be granted in South Africa from 40 to 41 during
FY2016/17 with the additional licence being allocated to the North West Province.
12Increase in number of operational bingo positions per province,
FY2015/16 to FY2017/18 (as at 31 March 2018)
3 500
3 000
2 500
2 000
1 500
1 000
500
0
Gauteng Mpumalanga North West Limpopo Eastern Cape KwaZulu-Natal
Operational traditional bingo positions, FY2015/16 1 204 159 113 0 56 854
Operational traditional bingo positions, FY2016/17 926 159 113 0 0 690
Operational traditional bingo positions, FY2017/18 659 52 113 80 0 1 073
Operational EBTs, FY2015/16 1 736 170 307 0 1 433 0
Operational EBTs, FY2016/17 1 930 170 521 0 1 988 0
Operational EBTs, FY2017/18 2 415 617 721 510 2 190 90
Operational bingo positions, FY2015/16 2 940 329 420 0 1 489 854
Operational bingo positions, FY2016/17 2 856 329 634 0 1 988 690
Operational bingo positions, FY2017/18 3 074 669 834 590 2 190 1 163
EBTs: More than traditional bingo seats
and highest increases showed
13Trend in GGR, betting on horse racing and sport, FY2013/14 - FY2017/18
Highest increase in GGR in betting
4 000 000 000
via bookmakers on sport
3 500 000 000
3 000 000 000
2 500 000 000
2 000 000 000
1 500 000 000
1 000 000 000
500 000 000
0
Bookmakers, Horse racing Bookmakers, Sports betting Totalisators, Horse racing Totalisators, Sports betting
Bookmakers, Horse racing Bookmakers, Sports betting Totalisators, Horse racing Totalisators, Sports betting
FY2014 718 915 378 894 571 335 1 111 365 062 109 251 620
FY2015 793 930 124 1 430 026 112 1 087 285 775 151 752 708
FY2016 1 023 035 305 2 157 995 813 1 023 264 197 244 470 444
FY2017 1 145 152 334 2 632 669 149 1 026 450 253 281 358 927 14
FY2018 1 289 865 606 3 563 907 799 947 674 300 335 385 203Trend in taxes/levies collected relevant to betting on horse racing and sport,
FY2013/14-FY2017/18
R 250000 000
R 200000 000
R 150000 000
R 100000 000
R 50000 000
R 0
Bookmakers, Horse racing Bookmakers, Sports betting Totalisators, Horse racing Totalisators, Sports betting
Bookmakers, Horse racing Bookmakers, Sports betting Totalisators, Horse racing Totalisators, Sports betting
FY2013/14 R 191426 209 R 50436 312 R 77014 901 R 11153 955
FY2014/15 R 171539 696 R 80477 317 R 77654 988 R 13256 731
FY2015/16 R 185853 671 R 116983 455 R 78996 242 R 14942 372
FY2016/17 R 191457 705 R 149433 682 R 69202 264 R 20403 459
FY2017/18 R 207019 752 R 205840 847 R 66260 932 R 20695 820
15DIRECT EMPLOYMENT PER PROVINCE AND MODE, FY2017/18
PROVINCE
FY
Gambling Western KwaZulu- Mpuma- North Northern Eastern Free
2017/ Gauteng Limpopo TOTAL
mode Cape Natal langa West Cape Cape State
18
Casinos 5 491 2 307 2 497 729 254 763 248 863 713 13 865
Totalisators 205 15 1 456 79 22 123 13 75 80 2 068
Bookmakers 528 159 2 747 955 457 809 5 29 118 5 807
LPMs 138 2 966 98 150 510 53 23 218 29 4 185
Bingo 468 N/A 294 125 254 213 N/A 108 N/A 1 462
Regulators
NGB
26 70 70 77 54 83 19 48 76 26497
PLAs
Total 6 856 5 517 7 162 2 115 1 551 2 044 308 1 341 1 016 27 910
16Based on the information submitted by PLAs, the average B-BBEE status
or contributor level of the South African gambling industry as at 31 March
2018 per gambling mode and operator, was as follows:
• Average B-BBEE level for casino operators: Level 1.8.
• Average B-BBEE level for totalisators: Level 4.
• Average B-BBEE level for LPM operators: Level 2.8.
• Average B-BBEE level for bingo operators: Level 2.9 (currently only
operational in Gauteng, Mpumalanga, North West, Eastern Cape,
KwaZulu-Natal and Limpopo).
Increase in compliance from FY2016/17 to FY2017/18, certain levels
dropped due to implementation of the latest BBBEE codes.
1718 * More than one response allowed
Online gambling activities have grown substantially and become very
popular since the early 1990’s
2016 (Globally):
• 3,640 listed sites
• 1,155 site owners
• Operation in 127 jurisdictions
• 442 payment methods [Source: Casino City, 2016]
Popular games: Online casinos, poker rooms and sportsbook. New
games are emerging such as betting exchanges, tournaments and spread
betting and poker
Some countries that have prohibited online gambling are China, Greece,
Hungary, Lithuania, Luxemburg and some US (excluding online poker in
three states).
19 The estimated monetary flows associated with illegal (online) gambling in South
Africa impact the economy in the following ways with respect to employment and
GDP:
• Total loss in value add (the total contribution of the gambling industry to the
SA economy) of R1.9 billion for the economy as a whole per annum. This
includes a direct impact of R972 million and an indirect impact of R972 million.
This is less than 0.01% of total annual GDP for South Africa.
• Total loss of 3,785 employment opportunities in the legal gambling industry
based on employment in casinos (841) and employment in related services
such as retail outlets and restaurants (2,945). This equates to 5.9% of the
total employed persons in the casino industry of the country.
20• In terms of s16 of the Act, gambling winnings obtained by minors or excluded
persons, or winnings from illegal gambling activities, may not be paid over to such
punter.
• These monies must be forwarded to the NGB to investigate, and if they fall under
the above categories, then the monies must be forfeited to the State.
• The NGB collaborates with banking institutions, PLAs and law enforcement
agencies with the aim of gathering intelligence for the eradication of illegal
gambling activities.
• The NGB has thus far investigated a total of 141 cases to date, since matters were
referred to the NGB using the NGB2 Form in terms of the Act, Of this total, 103
cases were determined to be forfeited to the State.
• Two cases were determined to be refunded to the punters totalling R10,600.00.
• 6 cases were successfully forfeited to the State totalling R1,344,614.41.
21• The urgency to reposition the National Gambling Board (NGB).
• Loopholes in the legislation:
– Exploitation of gambling activities (e.g betting on lotteries)
• The proliferation of electronic bingo terminals.
• Slow transformation in the industry.
• Self regulated horse racing industry:
– Labour issues, transformation, no norms and standards.
• Coordination between the national and provincial legislation:
– Alignment,
– Litigations, and
– National Gambling Policy Council.
• Illegal gambling in South Africa:
– Enforcement powers in the legislation.
– Onerous burden to ensure unlawful winnings forfeit to the state regardless of the amount of
winnings through the High Court.
22Provision Generic Comment Final Position
Section 1 definition of Provision was supported The provisions are
bingo game is amended to with reservation of the retained.
enable the offering of limitations of licences and
electronic bingo terminals machine numbers.
(EBTS).
Section 44A is inserted to
provide for limited numbers
of licences and machines.
According to the NGB
the country has 6543
EBTs by 2017/18.
23Provision Generic Comment Final Position
Section 8 and Section 30 are Provinces are The provisions will be
amended to restrict lottery related concerned this will retained. the dti also
licences under the gambling cause them to lose undertook to engage
legislation. And Section 44C is revenue, while the industry when the
introduced to provide that bets on operators are divided rate of contribution
lottery results or conducting sports and also concerned into the NLDTF is to
pools must be licensed under the about the rate Minister be determined.
lottery legislation by the board of will impose for
the National Lotteries Commission. contribution towards the
Licensees must contribute towards NLDTF.
the NLDTF.
24Provision Generic Comment Final Position
Section 14(13) is inserted Supported. Provision remains as it is.
to provide that the
Gambling Operators must
remove names of excluded
persons from their mailing
list.
Section 15 is amended to Provision was supported The provision is to ensure
empower Minister to from public but is opposed limitations of the
regulate times of gambling mainly by the Casino overstimulation of
advertising and to prevent Association of South Africa gambling and the provision
unsolicited gambling for being too restrictive on must be retained.
messages through sms or regulation of times.
internet.
25Provision Generic Comment Final Position
Section 16 is amended to There were concerns that The provision is revised to
provide that money the provision may permit require that the NGB must
forfeited as unlawful arbitrary exercise of power ensure that the Promotion
winnings should be by the NGB. of Administrative Justice
automatically forfeited Act is complied with before
without court order and the money is declared
paid over into the NGR to forfeited.
fund activities relating to But there will be no need
problem gambling. for court order as the
provision originally
required.
26Provision Generic Comment Final Position
Section 17 is amended to There is general concern Provision was further
require that gambling about existing premises amended to require that
premises in shopping and those within multistory premises in multistory
complexes must have skyscraper buildings. buildings be located on
separate entrances from Some believe the separate floors from the
other shops at the complex restriction is unfair on rest of shops.
or malls. legitimate business The rest remained as
The provision is also operation as no other form gambling needs to be
amended to prohibit leases of business has to endure carefully regulated to
for unlicensed gambling the same restrictions. prevent the
operators or activities. overstimulation.
27Provision Generic Comment Final Position
Section 27 is amended to Limited Payout Machine In line with the approved
ensure that the third party operators recommended policy the Bill currently
is appointed to operate the that the NCEMS be left to provides that the NGB
National Central Electronic them as it is the case in must develop capacity to
Monitoring System other gambling modes. extend the NCEMS to all
(NCEMS) gets a national Some provinces believe other gambling operations.
licence. they must operate the
NCEMS and that it must
be extended to all
gambling modes as they
often struggle to get the
required information from
operators.
28Provision Generic Comment Final Position
Section 33 is amended to Provinces believe that the The role will remain with
emphasise the NGR’s role provision encroaches on the NGB.
in ensuring that the socio- their independence to Section 65C is inserted to
economic effects of license gambling. establish an ad hoc
gambling are considered The NGR without a board Committee of the NGR by
before PLAs approve in will also mean the internal and external
excess of five (5) LPM decisions adopted by the people to deal with
sites. PLA boards can be concerns about CEO over-
overturned by one person turning the decisions of
in the form of a CEO thus boards of PLAs.
undermining collective
expertise of boards of
PLAs.
29Provision Generic Comment Final Position
Section 44B (1) and (2) is Operators questioned why a The provisions will be
amended to provide for the similar position is not retained as horseracing has
recognition of self-regulation extended to other types of always been about betting
in the industry and sporting activities as and all funding in the
monitoring by the NGB horseracing is a sport. They industry is sourced from
through the Standard prefer to continue with self gambling.
Operating Procedures to be regulation without being Monitoring the self-
approved by the National monitored. regulating body will also help
Gambling Policy Council to ensure credible races are
(NGPC). held for credible results and
fair treatment is accorded to
all who participate in the
industry.
30Provision Generic Comment Final Position
Section 44C is amended to Bookmakers and tote The provision is retained
provide for the PLAs to operators oppose the as we believe it will help
help determine a payable provision. resolve the stand off
rate by bookmakers Bookmakers believe the between the two important
towards the development current contribution of 6% betting stakeholders.
of horseracing as they take to provincial licensing
bets on horseracing Authorities (PLAs) with half NB: Bookmaker
products. The rate to be going to Tote operators is contribution of 6% is a
determined must consider enough. subject of the Public
current contributions by Tote operators want the Bill Protector inquiry into the
bookmakers. to stay out of the dispute. horseracing.
31Provision Generic Final Position
Comment
Section 62(1)(g) is inserted to require Supported if it Provision remains
province to consult with the National does not usurp as it is.
Gambling Policy Council before amending the role of
their own legislation and their legislation will provincial
be invalid if no consultation happens. legislature.
Section 63A is inserted to provide that the There is The provision will
National Gambling Policy Council meeting opposition on the remain as it is.
be empowered to make decisions by ground that the
members in attendance at the following approach is
meeting if the previous meeting failed to against corporate
reach a quorum. governance.
32Provision Generic Comment Final Position
Section 64 of the Act is There was opposition on The repositioning will
amended to remove the the basis that the NGB remain but Section 65C is
board from the structure of also need to approve LPM inserted to establish an ad
the NGB and to the NGB sites in excess of five hoc Committee of the NGR
to become the National machines with the by internal and external
Gambling Regulator (NGR) implication that the CEO people to deal with
led by CEO. will overturn the decision of concerns about CEO over
PLA Boards. turning the decisions of
boards of PLAs.
33Provision Generic Comment Final Position
Section 76A is inserted to provide for The provision is The provision will
the NGR to develop the inspectorate supported but there is remain as it is.
capacity to enforce against illegal a proposition that the
gambling operations in the country. dti reconsider its
This includes measures to notify banks stance on online
and internet service providers to cease gambling.
doing business with an illegal operator.
Section 76 is also amended to insert a
provision that the NGR keeps a register
of illegal gambling operators.
34• The Bill has been certified by the Office of the Chief State
Law Advisor prior to approval by Cabinet.
• The Committee to note the Bill and its content.
35THANK YOU
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