Western Cape Gambling and Racing Board - Annual Performance Plan 2021-2022 - Western Cape ...

 
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Western Cape Gambling and Racing Board - Annual Performance Plan 2021-2022 - Western Cape ...
Western Cape
Gambling and Racing Board

  Annual Performance Plan
                2021-2022
WESTERN CAPE
          GAMBLING
             AND
        RACING BOARD

     ANNUAL
PERFORMANCE PLAN

                   2021/2022

Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22   1
EXECUTIVE AUTHORITY STATEMENT

The Western Cape Gambling and Racing Board (WCGRB) is responsible for providing a stable, just, consistent and
effective regulatory environment for gambling in the province. Furthermore, it must inspire public confidence and
trust that gambling in the province is conducted honestly and is free from corrupt elements.

In addition, it also ensures that gambling contributes towards the economy of the Western Cape. This is done in two
ways – firstly with the industry itself creating opportunities for employment and contributing to the tourism sector,
and secondly through the collection of taxes and levies that contribute to government revenue. The latter is used for
the purposes of service delivery in education, health and infrastructure, amongst other, in the Western Cape.

In setting out the WCGRB’s Annual Performance Plan for 2021/22 guidance was taken from the vision of the Western
Cape Provincial Strategic Plan, 2019-2024 which seeks to create “A safe Western Cape where everyone prospers”.

The plan includes five Vision-inspired Priorities or “VIPs”:
1. Safe and cohesive communities
2. Growth and jobs
3. Empowering people
4. Mobility and spatial transformation
5. Innovation and culture

The outcomes of the WCGRB are also aligned to the National Development Plan strategic outcomes.

This is all taken into consideration in the development of the WCGRB’s vision which, over the next five years, aims to
be the leading gambling regulatory authority for innovative, sustainable business practices, that maximises economic
opportunities in a socially responsible manner with the purpose of having a properly regulated gambling industry in
the Western Cape.

To this end, the Annual Performance Plan will assist in monitoring and evaluating the performance of the Board
against set criteria, thereby enhancing corporate governance, effectiveness, efficiency and public accountability.

The WCGRB have my full support as they set about implementing the 2021/22 Annual Performance Plan to ensure the
objectives and matching programmes achieve maximum benefit for all who live in the Western Cape.

Mr David Maynier
Minister for Finance and Economic Opportunities

 2                     Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
ACCOUNTING AUTHORITY STATEMENT

It gives me great pleasure to present, on behalf of the Board, the Annual Performance Plan (APP) of the Western Cape
Gambling and Racing Board for the 2021/22 financial year. This Board’s 2021/22 APP is rooted in the principles and
targets of the development trajectory as set out in South Africa’s National Development Plan.

The APP of the Board is informed by the Provincial Strategic Plan (PSP) 2019 - 2024. The PSP sets out the Western
Cape Government’s (WCG) vision and strategic priorities. Its content is defined by the WCG’s approach to addressing
the economic, social, and development challenges in the Province. The following priorities were outlined in the
Government’s Plan of Action and the Premier’s State of the Province Address:
•   Economy and jobs
•   Empowering people
•   Public transport, mobility and spatial transformation
•   Safe and cohesive communities
•   Innovation across government and culture change in the Western Cape.

Where possible, the planned outputs of the Board have been linked to the Strategic Priorities as set out in the PSP to
ensure that the Board’s planned performance is in line with the strategic objectives of the Western Cape Provincial
Government.

The Annual Performance Plan details the pre-determined objectives and targets for the year under review whilst
projecting intended performance targets and programme indicators for the two outer years in the Medium Term
Expenditure Framework of the Board and it does so with the eye on the country, and the Province’s key strategic
priorities as well as the current socio-economic constraints and opportunities.

The APP unpacks the activities as well as administration budget essential for achieving the Board’s goals. In doing
so the WCGRB reaffirms its commitment in the period under review to enforce effective regulation of the gambling
industry.

The Western Cape Gambling and Racing Board has been charged with the responsibility to perform all functions
assigned to it in terms of the Western Cape Gambling and Racing Act, 1996 (Act 4 of 1996).

The objectives of the Board are to control and regulate gambling within the Province of the Western Cape to:
•  provide a stable, just, consistent and effective regulatory environment;
•  inspire public confidence and trust, in an environment free from corruption and unlawful gambling and racing
   activities; and
•  contribute to the economy of the Western Cape in an innovative and socially responsible manner.

Mr David Lakay
Accounting Authority: Chairperson of the Board

                Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22                           3
OFFICIAL SIGN-OFF

It is hereby certified that this Annual Performance Plan:

•       was developed by the members of the Board and the management of the Western Cape Gambling and Racing
        Board under the guidance of Minister D Maynier;
•       was prepared in line with the 2020-2025 Strategic Plan of the Western Cape Gambling and Racing Board;
•       accurately reflects the performance targets which the Western Cape Gambling and Racing Board will endeavour
        to achieve given the resources made available in the budget for 2021/22.

Ms Yvonne Skepu
Manager: Legal Services

Ms Sweetness Sixubane
Manager: Human Resources

Ms Megan Basson
HOD: Licensing

Mr Robin Bennett
HOD: Regulatory Compliance

Mr Alwin Matthews
HOD: ICT

Ms Zoé Siwa
Chief Financial Officer

Mr Primo Abrahams
Chief Executive Officer

Mr David Lakay
Accounting Authority: Chairperson of the Board

Approved by:

Mr David Maynier
Executive Authority/Minister for Finance and Economic Opportunities

    4                    Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
ABBREVIATIONS/ACRONYMS

The following list contains all the abbreviations/acronyms that is utilised throughout the annual performance plan,
irrespective of which section of the annual performance plan it pertains to:

Abbreviation/
                      Description
Acronym
4IR                   Fourth Industrial Revolution
5IR                   Fifth Industrial Revolution
ADFIN / Adfin         Administration and Finance
APP                   Annual Performance Plan
AOP                   Annual Operation Plan
BBBEE                 Broad Based Black Economic Empowerment
Board                 Western Cape Gambling and Racing Board
board                 Collective of non-executive Board members
CASA                  Casino Association of South Africa
Capex                 Capital Expenditure
CEO                   Chief Executive Officer
CFO                   Chief Financial Officer
CSI                   Corporate Social Investment
Constitution          The National Constitution of the Republic of South Africa, 1996
COVID-19              Coronavirus disease 2019
DoL                   Department of Labour
DRP                   Disaster Recovery Plan
DTIC                  Department of Trade, Industry and Competition
DTPW                  Department of Transport and Public Works
EE                    Employment Equity
ERM                   Enterprise Risk Management
EXCO                  Executive Committee
FIC                   Financial Intelligence Centre
FICA                  Financial Intelligence Centre Act, 2001
FY                    Financial Year
GGR                   Gross Gambling Revenue
GLC                   Gambling Liaison Committee
GRAF                  Gambling Regulators Africa Forum
GRAP                  Generally Recognised Accounting Practice
G2E                   Global Gaming Exposition
HOD                   Head of Department
HR                    Human Resources
ICT                   Information and Communication Technology
IT                    Information Technology
ITIL                  Information Technology Infrastructure Library

                Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22                        5
ABBREVIATIONS/ACRONYMS

IYM           In Year Monitoring
LPM           Limited Pay-out Machines
MEC           Member of the Provincial Executive Council
Minister      Western Cape Minister of Finance and Economic Opportunities
MOU           Memorandum of Understanding
MTEF          Medium Term Expenditure Framework
NAT JOINTS    National Joint Operation Intelligent Structure
NCEMS         National Central Electronic Monitoring System
NCGB          Northern Cape Gambling Board
NGB           National Gambling Board
NTR           National Treasury Regulations
OD            Organisational Development
OHASA         Occupational Health and Safety Act, 1993
Opex          Operational Expenditure
PAC           Public Accounts Committee
PAIA          Promotion of Access to Information Act, 2000
PAJA          Promotion of Administrative Justice Act, 2000
PESTEL        Political, Economic, Social, Technological, Environmental and Legal
PFMA          Public Finance Management Act, 1999
PGWC          Provincial Government of the Western Cape
PLA           Provincial Licensing Authority
PI            Performance Indicator
POPI          Protection of Personal Information Act ,2013
PSP           Provincial Strategic Plan
RFI           Request for Information
RFP           Request for Proposal
SARS          South African Revenue Service
SAPS          South African Police Services
SARGF         South African Responsible Gambling Foundation
SCA           Supreme Court of Appeal
SC            Senior Counsel
SCM           Supply Chain Management
SCOFEOT       Western Cape Provincial Parliament’s Standing Committee on Finance, Economic
              Opportunities and Tourism
SCOPA         Standing Committee on Public Accounts
SOP           Standard Operating Procedures
SP            Strategic Plan
Act           Western Cape Gambling and Racing Act, 1996
TID           Technical Indicator Descriptions

6            Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
A        ABBREVIATIONS/ACRONYMS

TIPS                 Trade and Industrial Policy Strategies
TR                   Treasury Regulations
Type B LPM Site      Sites with 6 to 20 LPMs
Type C LPM Site      Sites with 21 to 40 LPMs
UPS                  Uninterrupted Power Supply
VIPs                 Vision-inspired Priorities
WC                   Western Cape
WCDTPW               Western Cape Department of Transport and Public Works
WCED                 Western Cape Education Department
WCG                  Western Cape Government
WCGRB                Western Cape Gambling and Racing Board
WCPT                 Western Cape Provincial Treasury
WSP                  Work Skills Plan
Western Cape         The Province of the Western Cape

               Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22   7
CONTENTS

PART A: Our Mandate                                                                             9
1.    Relative legislative and policy mandates		                                               10
2.    Institutional Policies and Strategies                                                    12
3.    Relevant Court Rulings                                                                   13

PART B: Our Strategic Focus                                                                    15
4.    Situational Analysis                                                                      16
4.1   External environment analysis                                                             16
4.2   Internal environment analysis                                                            20

PART C: Measuring Our Performance                                                              29
5.    Institutional Programme Performance Information                                          30
5.1   Programme 1: Board and Administration		                                                  30
5.2   Programme 2: Licensing                                                                   35
5.3   Programme 3: Regulatory Compliance                                                       37
5.4   Programme 4: Information and Communication Technology                                    40

PART D: Technical Indicator Descriptions (TID)                                                 43
6.    Programme   1: Board and Administration                                                  44
7.    Programme   2: Licensing (TID)                                                           52
8.    Programme   3: Regulatory Compliance (TID)                                               54
9.    Programme   4: Information and Communication Technology (TID)                            57

PART E: Annexures to the Annual Performance Plan                                               61
10.   Annexure A: Amendments to the Strategic Plan                                             62

 8                  Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
A   OUR MANDATE

              9
OUR MANDATE

1.      Relative legislative and policy mandates

Basic Conditions of Employment Act,                           Financial Intelligence Centre Act, 2001
1997 (Act 75 of 1997) as amended                              (Act 38 of 2001), as amended (“FIC Act”)
This Act outlines the basic conditions of employment for      The FIC Act established the Financial Intelligence
workplaces in South Africa and has a direct bearing on        Centre and Money Laundering Advisory Council to
employees of the Western Cape Gambling and Racing             combat money laundering and financing of terrorist and
Board.                                                        related activities. The Board is, pursuant to this Act a
                                                              supervisory body and its licence holders are accountable
Broad-Based Black Economic                                    institutions. The FIC Act accords a number of statutory
Empowerment Act, 2003 (Act 53 of                              duties, functions and powers on the Board in exercising
2003) and Codes as amended                                    its supervisory oversight of the gambling industry.
This Act constitutes the legislative framework for the
promotion of black economic empowerment; empowers             Intergovernmental Relations Framework
the Minister of Trade and Industry to issue codes of good     Act, 2005 (Act 13 of 2005)
practice and to provide for matters connected therewith.      This Act establishes a framework for the national
The Board enforces the legislative and policy objectives      government,      provincial   governments    and   local
on Broad-Based Black Economic Empowerment through             governments to promote and facilitate intergovernmental
the imposition of licence conditions on licence holders       relations; to provide for mechanisms and procedures to
and complies with the prescripts that is binding on the       facilitate the settlement of intergovernmental disputes;
Board as a public entity.                                     and to provide for matters connected therewith.

Disaster Management Act, 2002 (Act 57                         Labour Relations Act, 1995 (Act 66 of
of 2002) as amended and Regulations                           1995) as amended (“LRA”)
This Act establishes a legal framework for an integrated,     The LRA regulates and guides the Board, as employer, to
co-ordinated disaster management policy that focuses          give effect to the rights, duties and structures created in
on preventing or reducing the risk of disasters, mitigating   terms of that Act and in so doing ensure labour harmony
the severity of disasters, emergency preparedness, rapid      and the democratisation of the work place.
and effective response to disasters and post-disaster
recovery. It provides for the establishment of national,      National Gambling Act, 2004 (Act 7 of
provincial and municipal disaster management centres          2004) and Regulations
with a policy focus on the rehabilitation and functioning     This Act sets out the competencies of the national and
of these centres. It further provides for the alignment       provincial gambling Boards with respect to the regulation
of the functions of the National Disaster Management          and control of gambling and racing in South Africa. This
Advisory Forum to accommodate the South African               Act, together with the Western Cape Gambling and
National Platform for Disaster Risk Reduction. Various        Racing Act, 1996 and the respective Regulations passed
Regulations were published in 2020 to address, prevent        thereunder, constitutes the statutory mandate of the
and combat the spread of the Coronavirus COVID-19.            Board as Regulator.
Various Guidelines and Regulations were issued under
the Disaster Management Act to regulate the conduct           This Act further provides for uniform norms and
and impose restrictions on individuals, employers and         standards with respect to gambling and racing
businesses to manage and prevent the risk of exposure         throughout the Republic.
and transmission of the coronavirus.
                                                              Occupational Health and Safety Act, 1993
Employment Equity Act, 1998 (Act 55 of                        (Act 85 of 1993) as amended
1998) as amended                                              This Act provides for the health and safety of persons
This Act constitutes the legal framework for the              at work and for the health and safety of persons in
elimination of unfair discrimination in the workplace         connection with the use of plant and machinery; the
and prescribes the processes and procedures that              protection of persons against health and safety hazards
the Board must implement to achieve a diverse and             arising out of or in connection with the workplace; and to
competent workforce that is broadly representative of         provide for matters connected therewith.
the demographics of the Western Cape.

 10                   Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
A           OUR MANDATE

Preferential Procurement Policy                                   is to ensure that all revenue, expenditure, assets and
Framework Act, 2000 (Act 5 of 2000)                               liabilities of government institutions and departments
and Regulations                                                   are managed efficiently and effectively; provides for
                                                                  the responsibilities of persons entrusted with financial
This Act constitutes the framework within           which the
                                                                  management in government and to provide for matters
Board must give effect to the Constitutional       imperative
                                                                  connected therewith.
of implementing a preferential procurement         policy and
system that is fair, equitable, transparent         and cost-
effective.
                                                                  Skills Development Act, 1998 (Act 97 of
                                                                  1998)
Promotion of Access to Information Act,                           This Act provides an institutional framework to devise
2000 (Act 2 of 2000) (“PAIA”)                                     and implement national, sector and workplace strategies
                                                                  to develop and improve the skills of the South African
PAIA prescribes the statutory process according to
                                                                  work force; to integrate those strategies within the
which applications or requests for access to information
                                                                  National Qualifications Framework contemplated in
are considered and processed and gives effect to
                                                                  the South African Qualification Authority Act, 1995;
the constitutional right of access to information. It is
                                                                  to provide for learnerships that lead to recognised
applicable to both private entities or organisations and
                                                                  occupational qualifications; to provide for the financing
public bodies.
                                                                  of skills development by means of a levy-grant scheme
                                                                  and a National Skills Fund; to provide for and regulate
Promotion of Administrative Justice Act,
                                                                  employment services; and to provide for matters
2000 (Act 3 of 2000) (“PAJA”)
                                                                  connected therewith.
PAJA was enacted pursuant to section 33 of the
Constitution of the Republic of South Africa, to give
                                                                  Skills Development Levy Act, 1999 (Act 9
effect to the right to administrative action that is lawful,
                                                                  of 1999)
reasonable and procedurally fair and the right to request
                                                                  This Act provides for the imposition of a skills development
written reasons for administrative action taken. As a
                                                                  levy; and for matters connected therewith.
public body, the Board is bound to give effect to the
principles of procedurally fair administrative action as
prescribed by this Act.
                                                                  The Constitution of the Republic of South
                                                                  Africa, (Act 108 of 1996)
Protection of Personal Information                                This is the Supreme law of the country and outlines inter
Act, 2013 (Act 4 of 2013) (“POPI”) as                             alia South Africa’s system of government, the role and
amended                                                           responsibilities of the different spheres of government,
                                                                  the basic human rights of all citizens and creates a
POPI’s objectives are inter alia to promote the protection
                                                                  number of Constitutional institutions.
of personal information processed by public and private
bodies; to introduce certain conditions to establish
minimum requirements for the processing of personal
                                                                  Western Cape Gambling and Racing Act,
information and to provide for the establishment of an
                                                                  1996 (Act 4 of 1996) as amended and
Information Regulator to exercise certain powers and to
                                                                  Regulations
perform certain duties and functions in terms of this Act.        This is the primary legislation governing the Board’s
Certain provisions of POPI took effect on 11 April 2014.          regulatory functions and powers. It sets out inter alia
Sections 2 to 38; 55 to 109; 111; and 114(1), (2) and (3) shall   the establishment and operations of the Board, the type
commence on 01 July 2020 and sections 110 and 114(4)              of licenses that the Board is empowered to consider as
shall commence on 30 June 2021. The effect of this is             well as the Board’s sources of funding. It further provides
that all organisations must be compliant with POPI by 1           for the imposition of statutory taxes and fees payable
July 2021.                                                        by licence holders, as well as administrative penalties for
                                                                  non-compliance.
Public Finance Management, 1999 (Act 1
of 1999) (“PFMA”) as amended
The Board is a Schedule 3C Provincial Public Entity
and bound by the financial and budget management
prescripts of this Act. The PFMA’s primary objective

                  Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22                                11
OUR MANDATE

2.        Institutional Policies and Strategies

The Board’s policies are based on the Constitution, the           the WCG an employer of choice in the province. It
Act, the National Act, National Treasury Instructions,            also includes keeping corruption out of the Western
Provincial Treasury Instructions and such other laws and          Cape.
regulations applicable to the Board.
                                                              In terms of section 4 of the Act, the main object of
The Provincial Strategic Plan 2019 – 2024 (PSP) that was      the Board shall be to control all gambling, racing and
launched by the Premier in March 2020 is the guiding          activities incidental thereto in the Province subject to
document for the growth and development of the                this Act and any policy determinations of the Executive
Province. It outlines the priorities of the Western Cape      Council relating to the size, nature and implementation
Government (WCG) in the form of five Vision-Inspired          of the industry.
Priorities (VIPs), namely:
                                                              The Western Cape Gambling and Racing Board is
1.    A safe Western Cape where everyone prospers:            therefore the Provincial Licensing Authority for gambling
      Improving law enforcement and crime fighting by         and racing in the Province of the Western Cape and is
      ensuring and supporting a modern, honest and            therefore not a service delivery public entity. For that
      professional provincial police service in the Western   reason, the Board’s outcomes cannot directly be linked
      Cape, and partnering with national and local            to all the key strategic priorities in the Government’s Plan
      government, State-owned Enterprises, civil society      of Action.
      and communities, and creating safe spaces.
                                                              The Board has assessed the alignment of its plans with
2.    Growth and Jobs: Growing the economy and creating       the Vision-Inspired Priorities. These alignments are
      fair access to real and long-term jobs in the Western   disclosed in Part C: Measuring our Performance under
      Cape (“A job in every household”). This includes a      each Sub-Programme.
      primary focus on creating an enabling environment
      to grow the economy, especially through removing        The problem statements that frame the five VIPs have
      red tape, prioritising infrastructure and resource      not changed. What COVID-19 has done is to exacerbate
      resilience with a focus on water, energy and waste      the challenges that are confronting the Province, and
      and appropriate climate change responses.               new ones have emerged. For that reason, the Western
3.    Empowering people: It includes providing an             Cape Recovery Plan has been developed. It identifies
      education system that is accountable, retains as        the problems that require an urgent, whole-of-society
      many learners as possible, and prepares learners for    response in order to create jobs, foster safe communities,
      the fast-changing world of work in the Western Cape,    and promote the well-being of all the residents of the
      as well as building a healthcare system that delivers   Western Cape.
      quality care in the Western Cape. With the focus on
      Education, Health and Social Development, it links to   The Recovery Plan is built on four themes:
      youth development, child and family development,        •  COVID RECOVERY: The pandemic will be with us
      and arts, culture and sports aspects of dignity,           for the foreseeable future; existing measures must
      wellbeing and quality of life along the life-course.       continue and new ones put in place to deal with
                                                                 disruptions to the economy and service delivery.
4.    Mobility and spatial transformation: Safe, reliable,    •  JOBS: The economic impact of COVID-19 has been
      affordable and low carbon public transport, including      severe. We can only recover if our economy grows
      a provision rail service that runs on time and works       and our citizens generate income.
      in the Western Cape, and catalysing investment in       •  WELLBEING: Government must ensure that the
      mixed use, mixed income neighbourhoods through             basic human needs of our citizens are realised, as
      strategic land release. Speeding up the delivery of        guaranteed in the Constitution.
      basic services for all in the Western Cape is also      •  SAFETY: This is the over-arching theme for the
      prioritised, which includes housing opportunities.         Provincial Strategic Plan, and it is equally relevant
                                                                 going forward. It is inextricably linked with Wellbeing,
5.    Innovation and culture: Building capacity for
                                                                 as Safety cannot be achieved if basic human needs
      adaptive governance and management, innovation,
                                                                 are not met.
      governance for service delivery impact, and making

 12                     Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
A        OUR MANDATE

The Board’s strategy for the next financial year will be      This is also in line with the principle of the separation of
informed by the Western Cape Recovery Plan to ensure          powers.
that we assist the Western Cape Government, as far as
possible, with the COVID Recovery, Jobs, Wellbeing and        CASINO ENTERPRISES (PTY) LTD v
Safety.                                                       GAUTENG GAMBLING BOARD AND
                                                              OTHERS 2011 (6) SA 614 (SCA)
The Board embarked on in-house research in the form of        The court confirmed that internet gambling remains
a desktop analysis of jurisdictions that implemented play     illegal in South Africa. The Court further confirmed that
management systems to assist with responsible gambling.       persons offering or making available a gambling activity
The Board has completed the initial phase of information      within the borders of South Africa require a licence to do
gathering and a draft research report was circulated          so, even if their operations are situated extra-territorially.
to the industry for inputs and comment. Guided by the
comments received, the Board resolved to commission           VUKANI v WCGRB AND OTHERS CASE
further research into specific areas pertaining to problem    NUMBER 21127/2008 CAPE HIGH COURT
gambling and responsible gambling measures in the
                                                              The applicant brought an application to review the
Western Cape and the report will be refined in the new
                                                              granting of a key employee licence to an individual in
financial year, taking into account the inputs received.
                                                              circumstances where such applicant had pending legal
The Board intends to engage other PLAs and the NGB
                                                              proceedings. The judgement outlined the different factors
with the process of the player management card.
                                                              that the Board ought to consider when determining the
                                                              suitability of an applicant.
The Board has been requested to conduct further
research on becoming financially self-sufficient and
                                                              NATIONAL GAMBLING BOARD v
not rely on the Western Cape Government for financial
                                                              PREMIER OF KZN AND OTHERS (CCT
support.
                                                              32/01) 2001 ZACC, 2002 (2) SA 715
The gambling industry in the Province has matured and         In essence the dispute concerned the functional areas
stabilised and there is a need for further investment         of concurrent legislative competence with respect to
and injection of economic growth through licensing            gambling contained in schedule 4 of the Constitution.
of additional modes of gambling. The Board will invite        The Court dismissed the application as it found that both
prospective applicants to submit an expression of             organs of state failed to comply with Chapter 3 of the
interest to gauge the market opportunities.                   Constitution, Sections 40 and 41 in particular.

                                                              The Court re-iterated the duty on organs of state to avoid
3.       Relevant Court Rulings                               legal proceedings against one another and in particular
                                                              to adhere to the principles of co-operative governance
AKANI GARDEN ROUTE (PTY) LTD v                                as enshrined in the Constitution.
PINNACLE POINT CASINO (PTY) LTD
2001 (4) SA 501 (SCA)                                         TEEMANE (PTY) LTD T/A FLAMINGO
                                                              CASINO v THE CHAIRPERSON OF THE
The Court held that the regulation of gambling, and
                                                              NORTHERN CAPE GAMBLING BOARD
casinos in particular, is a Schedule 4 concurrent
                                                              (“NCGB”) CASE NUMBER 2023/2016
competence in the Constitution, in that both national and
provincial legislation may be passed in relation to same.     The Applicant challenged the decision of the Northern
Furthermore, the National Gambling Act 33 of 1996 vests       Cape Gambling Board that freeplay credits awarded
control and the regulation of gambling in independent         by the casino to its loyalty card holders forms part of
boards at national and provincial level. Section 2(2) of      the gross receipts for purposes of calculating the levy
the Western Cape Gambling and Racing Act provides             payable on gross gaming revenue. The Court concurred
that the right to carry on any gambling within the            with the Applicant’s submission that freeplay does not
province vests exclusively in the Board. The Court held       form part of gross receipts because the Applicant does
that Section 37(1) (j) of the provincial Act meant that the   not receive any revenue when a patron play utilizing the
competence to require guarantees vested in the Board          free credits. That the applicable Regulation 2 imposes a
and not the Provincial Executive Authority. It ruled that     levy on “revenue” received by a licensed operator. The
policy determinations cannot override, amend or be in         NCGB argued that the legislation makes no provision
conflict with laws, including subordinate legislation.        for the deduction of any costs. The Court opined that

                Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22                                13
OUR MANDATE

if the Legislature intended to include freeplay as part of   The Board resolved to appeal the judgement, after
a licensed Operator’s gross win, it ought to have done       having obtained legal advice on the prospects of success
so expressly. The Court set aside the Board’s decision       on appeal.
and substituted same with an order that freeplay credits
do not constitute nor form part of “gross receipts”, for     SUNWEST INTERNATIONAL (PTY) LTD
purposes of Regulation 2. It is therefore not taken into     AND WORCESTER CASINO (PTY) LTD v
account for the computation of “gross win”.                  WCGRB ET AL, CASE NUMBER: 2203/18
                                                             Two licence holders applied for a declaratory order in the
THE KWAZULU-NATAL BOOKMAKERS’                                Western Cape High Court, for an order in the following
SOCIETY AND 2 OTHERS v PHUMELELA                             terms:
GAMING AND LEISURE LTD AND 16                                •   Declaring that Freeplay credits do not constitute
OTHERS CASE NUMBER 38728/2015                                    a “drop” for the purpose of the computation of
The application was in the main for an order interdicting        adjusted gross revenue and does not form part of
the three Totalisators from offering sports pools, in that       the taxable revenue per Section 64 of the Act read
this conduct amounts to an encroachment on the powers            with Schedule III;
of the National Lottery and the National Lotteries Board.    •   Ordering that the Minister for Finance, in his capacity
It infringes the South African Constitution, 1996, the           as the custodian of the provincial revenue fund,
Lotteries Act, 1997 and the Rule of law and that, to the         refund the Applicants R44 570 465 and R1 763 983,
extent that any of the nine provincial gambling Boards           respectively in relation to taxes paid; and
authorised the Totalisators to offer sports pools, that      •   Alternatively that the Board offset the referenced
such authorisation would be unlawful. The High Court             amounts against the Applicants’ future liability to
dismissed the application. On appeal to the SCA, it ruled        pay gambling tax;
that the application was opportunistic and aimed at
achieving a monopoly in respect of betting on sports,        The Court held that Freeplay used to bet on slot machines
other than horse racing. The Court ruled that Totalisator    at the applicants’ casinos do not constitute part of the
betting on sports does not fall within the definition of     “drop” for purposes of the computation of adjusted gross
a sportspool as envisaged in the Lotteries Act and is        revenue in terms of section 64 of the Act”) read with
regulated in terms of National Gambling Act and the          Schedule Ill. Further that Freeplay credits accordingly do
provincial legislation. The appeal was therefore dismissed   not form part of taxable revenue in terms of section 64 of
with costs.                                                  the Act read with Schedule Ill. The Court directed that the
                                                             Board off-set the amount agreed between the parties or
TSOGO SUN & 3 OTHERS v WCGRB & 1                             proved by the Applicants against the applicants’ future
OTHER, CASE NUMBER: 21344/17                                 liability to pay gambling tax in terms of section 64 of the
The Applicants launched an application in the Western        Act read with Schedule Ill. Finally, that each party is to
Cape High Court, Cape Town for the review, setting aside     pay its own costs.
and declaring unlawful and invalid the Board’s decision
to impose BBBEE-related conditions of licence on the         The Board resolved to appeal the judgement, after
Applicants as licence holders. Further, that the Court       having obtained legal advice on the prospects of success
award costs against any party opposing the Application.      on appeal. The Minister and the Board filed Applications
The Board argued that it is empowered in terms of the        for Leave to Appeal.
BBBEE Act and the National Act to impose conditions
to ensure licence holders achieve certain BBBEE targets.
The matter was heard on 5 March 2019. Judgement was
delivered on 11 December 2019, in favour of the Board.
The Court held that the Board is competent to impose
the impugned conditions on existing licence holders;
that a review of the licence conditions is not a condition
precedent for imposing licence conditions and there are
no preconditions for the exercise of its powers; that the
Board did not rigidly fetter its discretion in deciding to
impose the impugned conditions and that the Board did
not act unreasonably and irrationally when it imposed
the impugned conditions. The Application was therefore
dismissed with costs.

 14                   Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
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B   STRATEGIC
    FOCUS

                15
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4.          Situational Analysis
The Western Cape Gambling and Racing Board (WCGRB)             •   Although Gauteng, compared to other provinces,
is a statutory body constituted in terms of the Western            generated the highest amount of GGR relative to
Cape Gambling and Racing Act. The WCGRB is a Schedule              casinos (44.3%), betting on horse racing and sport
3C PFMA provincial public entity with the Western Cape             (43.6%), and bingo (40.8%), the highest amount of
Provincial Treasury as its parent/responsible department.          GGR in the LPM sector was generated in Western
There are two levels of oversight of the Board’s affairs. At       Cape (26.8%) in FY2018/19.
national level, the NGB conducts oversight evaluations         •   A total amount of R3 billion of taxes and levies was
and at provincial level the Board reports to Provincial            collected during FY2018/19.
Treasury and the Western Cape Provincial Minister of
Finance and Economic Opportunities. The Provincial             •   During FY2018/19 at 62.3%, casinos contributed the
Parliamentary Oversight committees are the Standing                highest amount of taxes/levies paid by comparison to
Committee on Finance, Economic Opportunities and                   other gambling modes. Although Gauteng collected
Tourism; and Public Accounts Committee.                            the highest amount of taxes/levies in FY2018/19, the
                                                                   largest portion of taxes/levies in the LPM sector were
The external effect of the Board’s area of responsibility          collected in Kwazulu-Natal (31.7%) and the Western
is centred on development of socially responsible                  Cape (27.5%).
economic reforms and the protection of the public while        •   Overall, growth was recorded in terms of GGR
safeguarding the industry.                                         generated in the gambling industry – an increase by
                                                                   7.0% from FY2017/18 to FY2018/19.
To this end, the Board continuous to monitor the industry
                                                               •   The highest increase in GGR was noted in the bingo
for any over stimulation and rapidly advancing changes.
                                                                   sector (26.6%) followed by the betting sector (17.8%)
                                                                   and specifically as a result of betting on sports as
                                                                   offered by bookmakers. For the LPM sector an
4.1         External environment analysis
                                                                   increase by 13.2% was reflected during the same
The Board has utilised the PESTEL analysis to analyse the
                                                                   period. Casino GGR growth decreased by 1.2% in
factors that may have a profound impact on the Board’s
                                                                   2018/19 when compared to the growth in 2017/18.
performance.
                                                               •   The highest growth in GGR generated per
GAMBLING INDUSTRY IN SOUTH AFRICA                                  province was noted in Limpopo (23.4%), largely
                                                                   due to increases in the number of active LPMs and
The following information represents the audited National
                                                                   operational bingo positions, followed by Kwazulu-
Gambling Statistics compiled by the National Gambling
                                                                   Natal (19.7%) and Mpumalanga (14.1%). A negative
Board in South Africa for the 31 March 2019 financial year:
                                                                   growth in GGR was recorded in North West and the
•        A total amount of R30.8 billion of gross gambling         Northern Cape.
         revenue (GGR) was generated during FY2018/19.
                                                               •   Although Gauteng represented the highest amount
•        During FY2018/19 casino GGR accounted for 60.5%           of turnover relative to casinos (45.1%), betting on
         of the gambling market followed by betting GGR with       horse racing and sport (60.7%), and bingo (40.2%)
         a market share of 23.5%. Limited Pay-Out Machines         compared to other provinces, the highest amount of
         (LPM) GGR accounted for 10.9% of the market whilst        money in the LPM sector was wagered in the Western
         bingo GGR had the least market share in terms of          Cape (27.9%) in FY2018/19.
         GGR of 5.1%.
                                                               •   The collection of taxes/levies increased by 6.8% to
•        From FY2009/10 to FY2018/19, the trend in market          R 3.1 billion from FY2017/18 to FY2018/19.
         share showed that the share of casino GGR in the
         market has dropped from 84.4% to 60.5%, whilst        WESTERN CAPE GAMBLING STATISTICS
         the share of other modes (betting, LPM and bingo
                                                               The information below was compiled by using the
         sectors) has increased.
                                                               National Gambling Statistics compiled by the National
•        Compared to all other provinces, Gauteng at a 41%     Gambling Board for the 31 March 2020 and 31 March
         share, accounted for the highest amount of GGR        2019 financial years in respect of the Western Cape.
         generated in FY2018/19 compared to Western Cape
         (17.2%) and Kwazulu-Natal (17.6%).

    16                    Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
B         OUR STRATEGIC FOCUS

•   As at 31 March 2020, GGR from all modes of gambling         The World Economic Forum suggests that “from a
    totalled R5.9 billion in the Western Cape. Of this total,   business perspective, companies generally cannot be
    casino GGR accounted for 49.8% of the gambling              successful in societies that are not functioning well.”
    market followed by betting GGR with a market of             With the educational drop-out rate expected to increase
    33.7% and LPM GGR with a market of 16.5%.                   due to disrupted education and reduced parental
                                                                finances, a higher unemployed youth rate and increased
•   Casino GGR amounted to R2.9 billion in FY2019/20
                                                                unemployment, it will take some time for society to
    with the same results reported for FY2018/19.
                                                                be functioning well again and accordingly for business
•   In terms of the generation of GGR, positive growth in       economic activity to reach close to normality.
    GGR has been recorded in all gambling modes except
    the casino sector, whereas the highest increase in          It is evident from recent tax collections and revenue
    GGR was noted in the betting sector (36% increase           statistics that the casino and horse racing sectors no
    since the prior year) followed by the LPM sector (12%       longer only experience a lower growth rate, but in some
    increase since the prior year).                             periods, a negative growth rate or decline. The industry
•   From FY2019 to FY2019, however, the trend in                is constantly seeking new contingencies for betting or
    market share showed that the share of casino GGR            increasing gambling revenue and this places a burden
    in the market has dropped from 55.4% to 49.8%, LPM          on the regulator to ensure that these contingencies are
    GGR share has dropped from 17.0% to 16.5% whilst            lawful and that the proper protection for the public is in
    the market share of betting GGR has increased from          place.
    27.6% to 33.7% in FY2019 to FY2020.
                                                                The ongoing ESKOM saga of rolling load-shedding
•   Taxes/levies to the amount of R687.7 million was            resulting in either interrupted operations of casinos or
    collected during FY 2019/20, representing an                high additional cost for alternate energy during these
    increase of 6% since the prior year.                        periods places an additional strain on the industry which,
•   A total amount of R74.2 billion was wagered in              as a result of the COVID-19 pandemic and National
    FY2019/20, representing an increase of 10% since            Lockdown, already suffered massive economic losses.
    the prior year.
                                                                The Board is aware of alleged and confirmed instances
ECONOMY                                                         of corruption in government institutions in South Africa
                                                                which threatens sustainable economic development,
The economic climate in which the industry currently
                                                                ethical values and endangers the rule of law. Corruption
operates is no different to that in which South Africa as
                                                                and international perceptions of corruption in South
a whole finds itself. The gambling rand now competes
                                                                Africa has been damaging to the country’s reputation
more vigorously with the spend on the basic needs as
                                                                and has created obstacles to local and foreign direct
presented in the Maslow theory of basic needs. The effect
                                                                investment, economic growth and has ultimately
of the COVID-19 Lockdown has an even greater strain
                                                                distorted the development and upliftment of citizens.
on the economy and the socio-economic environment.
                                                                The Board’s Fraud and Anti-Corruption Policy, which is
The COVID-19 pandemic and the associated national
                                                                reviewed annually, aims to ensure compliance to laws
lockdown with all its various regulations has had a marked
                                                                and regulations in the organisation. The procedures
effect on the economy and social welfare at large and
                                                                include a national hotline and an anonymous reporting
in particular, has seen the non-essential gambling sector
                                                                box to ensure that fraud and corruption can be reported.
both suffer and grow during the lockdown period.

                                                                INDUSTRY DEVELOPMENTS
Land based gambling has been hit hard by the lockdown
while on-line betting has thrived. The continued                The Board is in the process of investigating allegations
restrictions placed on places of entertainment, alcohol         of illegal gambling pertaining to pigeon racing. At this
sales and the general curfew has resulted in contracted         stage the information gathered suggest that the money
economic activity for the land based gambling entities          relative to this activity relates to the prize money for the
which has led to a reduced need for the number                  owners of the winning pigeons.
of resources required like, employees, hardware,
outsourced services and acquired consumable goods               The Board had approved contingencies for bookmakers
among other. This has led to a reduced revenue stream           which permitted the offering of betting to the public
with the consequence of retrenchments, lower spending           on casino type games. This approval was granted
and corporate social investments.                               after extensive consideration and although it resulted

                 Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22                               17
OUR STRATEGIC FOCUS

in the Board being named in a litigation matter with         REVIEW OF THE GAMBLING INDUSTRY
the Casino Association of South Africa, the Board was        There is uncertainty surrounding the relocation of an
satisfied that the legal basis for such approval was         outer lying casino to the metropole and the effect such
sound. CASA has since withdrawn the application and          relocation may have on the gambling industry in the
the matter is regarded as finalised. The offering of the     Province. Currently the Board has no role in the relocation
new contingencies provides a wider variety of betting        process other than providing comments on the proposed
contingencies that bookmakers could offer and these          amendments, which has since been published for public
alternative offerings also serve to obviate the decline in   comment.
the horse racing numbers.
                                                             Provincial Treasury commissioned research into the
Horse-racing as a sport has been a struggling industry       regulation of international junkets. The research is a
and the Board noticed a substantial decline in betting       review of the legal, practical, economic and taxation
taxes over the past year. Re-invigoration of horse-racing    considerations through a comparative analysis of the
as a sport is necessary to make it more appealing to the     different jurisdictions where international junkets are
younger generation, which could assist the operator/s        operational. This research is in its final stages and
to have a turnaround in this industry. Provincial Treasury   awaiting presentation to the Minister and the Board for
has embarked on research which explores the request for      final completion.
government assistance received from the Totalisator. An
external service provider was appointed to dissect the       Apart from the research commissioned by Provincial
economic position the Totalisator finds itself. The report   Treasury, the Board is reviewing the gambling landscape
concludes with recommendations on the options open           and gambling opportunities in the Western Cape. The
to the provincial government. This report is not made        LPM Operators engaged the Board on the roll-out of
public as yet and the Board awaits the financial decision    Type B and C LPMs in the Province. The Board issued
of the Minister and Province in respect of the research      3 000 LPMs, with each LPM Operator awarded 1 500
and findings.                                                LPM machines. The National Gambling Act, 1996 and
                                                             concomitant National Regulations allocates a total of 9
The Board’s position is that it advocates the legalising     000 LPMs for rollout in the Western Cape. The Board
and regulation of interactive gambling to protect patrons    approved a rollout of 3 000 LPMs when the first RFP
and for the applicable taxes to accrue to the fiscus.        was issued at inception of the gambling industry in this
While patrons, being the citizens of South Africa do not     Province.
have legal alternatives, they will not only be committing
a crime by participating in illegal online gambling, but     To date, the Board rolled out Type A LPM site licences,
also be left to the mercy of unscrupulous operators          which permits site operators to display up to 5 LPMs for
that are not regulated in terms of fair play, return to      play by patrons in their licensed LPM site establishments.
patron percentages, probity, licensing and suitability       Type B LPM site licences permit the rollout of up to 20
requirements. Licensed operators are vetted through a        LPMs and Type C LPM site licences permits the rollout of
rigorous licensing process to ensure that the industry       up to 40 LPMs in a licensed LPM site. These categories of
is free from corruption and illegal activities. The Board    LPM site licences attract additional regulatory approvals
opines that interactive gambling modes will afford           and distinct investment and regulatory requirements are
patrons protection from exposure to COVID-19 in that         prescribed for their operation. The Board is putting the
they can gamble at their leisure remotely, and will also     necessary measures in place to facilitate the rollout of
provide a much needed revenue injection given the            Type B and C LPM sites. The pre-rollout phase entails
current economic climate. The Board made submissions         engaging the Board’s oversight bodies, reviewing the
to policy makers at both provincial and national level       gambling Rules and controls and prescribing the broader
advocating that the mechanisms be put in place to            financial investment and statutory fees.
licence and regulate interactive gambling.
                                                             The rollout of Type B and C LPM licences will not only
                                                             boost the local economy and gambling taxes to the
                                                             provincial Fiscus, but will also foster job creation and
                                                             broad-based empowerment.

 18                   Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
B         OUR STRATEGIC FOCUS

CURRENT LEGISLATIVE CONSIDERATIONS                            Gambling and Racing Amendment Bill was published for
A briefing was held by the Department of Trade and            public comment on 24 April 2020, inviting comments
Industry before the National Council of Provinces Trade       to be submitted to the Standing Committee on Finance,
and Industry, Economic Development, Small Business            Economic Opportunities and Tourism by 29 May 2020.
Development, Tourism, Employment and Labour on 16             These fees in the main replace the casino exclusivity and
July 2019 on the Draft National Gambling Amendment            Route Operator fees that expired in terms of the 10-year
Bill. The scope of the Bill was substantially reduced         limitation prescribed in the Act. When these statutory
from the version initially published for comment.             fees are enacted, it will significantly bolster the Board’s
The Bill deliberated in the legislature focused on the        objective of becoming self-sufficient in terms of its
reconfiguration of the National Gambling Board, the           budgetary requirements. The WCGRB is reliant on the
expansion of the national central electronic management       WCPT to propose amendment of legislation to allow for
system to other modes of gambling and addressing the          changes in its revenue stream.
governance issues affecting the National Policy Council.
                                                              The Board received an invitation, per letter from
A further briefing was held by the Department of Trade,       the Western Cape Provincial Parliament’s Standing
Industry and Competition before the National Council of       Committee on Finance, Economic Opportunities and
Provinces Trade and Industry, Economic Development,           Tourism on 25 June 2020 to submit comments by 31 July
Small Business Development, Tourism, Employment and           2020 on the Western Cape Nineteenth Gambling and
Labour on 25 August 2020, to consider the final mandates      Racing Amendment Bill, 2020. The Board subsequently
of Provinces in respect of the National Gambling              made oral submissions before the Standing Committee
Amendment Bill [B27B-2018] 1. The Department of Trade,        on 9 September 2020.
Industry and Competition (DTIC) spoke to the rationale
and the background of the Bill, which commenced at the        The Draft Western Cape Twentieth Gambling and Racing
end of the Fifth Parliament and then revived in the Sixth     Amendment Bill, 2020 and the Draft Western Cape
Parliament. The final mandates of Provinces for the Bill      Twenty-First Gambling and Racing Amendment Bill,
were that three Provinces voted in support of the Bill,       2020 was published for public comment on 8 May 2020.
four Provinces voted against the Bill and there were two      The amendments in the Draft Western Cape Twentieth
abstentions. The Western Cape Province did not support        Gambling and Racing Amendment Bill in the main
the Bill. The National council of Provinces must make         provides for the relocation of a casino and addresses
a determination on the way forward, after seeking the         substantive issues pertaining the amendment of licences.
necessary legal guidance.                                     The amendments in the Draft Western Cape Twenty-
                                                              First Gambling and Racing Amendment Bill in the main
The Western Cape Gambling and Racing Regulations              introduces the new Casino exclusivity tax and economic
(Fees and Cost 2016) were amended on 25 March 2020 to         opportunity tax in relation to the relocation of a casino.
effect inflationary increases to the statutory application,
licence and investigation fees. These fees are updated        RESPONSIBLE GAMBLING
annually for inflationary adjustment.                         The effective implementation of a national exclusion
                                                              programme is hampered as the National Regulations
The Western Cape Gambling and Racing Regulations              aimed at regulating same is not operational. The Minister
(Fees and Costs 2016), Draft Second Amendment, 2020           of Trade, Industry and Competition (“DTIC”) must gazette
was published for comment on 8 May 2020 and prescribes        the date these Regulations shall take effect. The Board
the Application fee for amendment of a casino operator        hosted an engagement with the DTIC and the National
licence for purposes of relocation.                           Gambling Board to discuss, amongst other, the readiness
                                                              to enact the Regulations for commencement. The Board
The Draft Western Cape Nineteenth Gambling and                is continually engaging the said entities to fast-track the
Racing Amendment Bill, 2018 was first published for           exclusion register process, with the legislated mandate
comment on 28 February 2018. The Bill was re-published        to enforce same.
on 2 May 2019, with its scope reduced to dealing with
the statutory fees prescribed for Route Operator and
Casino Operator licence holders. The Draft Nineteenth

1       https://pmg.org.za/committee-meeting/30926/

                Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22                             19
OUR STRATEGIC FOCUS

CHALLENGES TO BE ADDRESSED
The Board’s challenges are motivated by its constraints. They include (see table overleaf):

 Challenge:                                           Mechanisms to address the challenges
 Vacancies on the Board, which places pressure on •          Board advises Minister in a timely manner of pending
 its effectiveness to honour scheduled meetings and          vacancies on the Board.
 consequently its mandate and affecting licence •            Board meetings scheduled well ahead of time to ensure
 holders as scheduled events, are postponed.                 that Board Members are timely and well-advised of the
                                                             meeting dates.
                                                      •      Board employs rescheduling of meetings and in
                                                             emergencies, round robin processes to ensure that the
                                                             Board remains effective.
 COVID-19 constraints places a significant •                 Business continuity management plan in place to sustain
 constraint on the WCGRB’s activities, revenue,              the operation of critical business services following a
 financial and logistical arrangements. The full             disaster or adverse event.
 impact of the pandemic will be ascertained as •             Business continuity plan continually reviewed for all
 the industry responds to the various stages and             WCGRB business operations in response to disruptors.
 levels of lockdown and opens up to the general •            The Board had to change its approach to adopt to the
 public in accordance with the National Lockdown             “new normal” and will continue to be flexible to respond
 Regulations.                                                to further disruptions brought about by the COVID-19
                                                             pandemic.

4.2     Internal environment analysis                          RESEARCH INTO LICENSING FURTHER MODES
                                                               OF GAMBLING
The vision of the Board is to be recognised as the leading     The Board is conducting research on those categories
gambling regulatory authority for innovative, sustainable      of licences outlined in section 27 of the Act that has to
business practices and maximisation of economic                date not been rolled out in the Western Cape. These
opportunities in a socially responsible manner.                include the licensing of junkets and Bingo offerings. The
                                                               Board previously conducted a socio-economic impact
The mission of the Board is to control and regulate            study to determine the impact of current gambling
gambling within the Province of the Western Cape, to:          modes on households, the surrounding communities and
•  provide a stable, just, consistent and effective            gamblers. Being mindful of the socio-economic impact
   regulatory environment;                                     of gambling on the inhabitants of the Province, the
•  inspire public confidence and trust, in an environment      Board is duty-bound to engage the public and interested
   free from corruption and unlawful gambling and              parties through a public participation process before
   betting activities; and                                     making a determination on the licensing of new modes of
•  contribute to the economy of the Western Cape in an         gambling. The Board must further balance the competing
   innovative and socially responsible manner.                 interests and rights that comes into play where economic
                                                               opportunities are created and a stringent process shall
The Board’s Strategic Focus for the 2021/22 Financial          be followed as and when the determination is made to
Year is outlined below:                                        licence further modes of gambling as envisaged in the
•  Research into the licensing of further modes of             Act.
   gambling in terms of the categories of licences that
   the Board is mandated to licence in terms of the            The other important considerations in making a
   Gambling and Racing Act and the National Gambling           determination in licensing further modes of gambling are:
   Act, 1996
•  Organisational Structure Review                             a. Increased revenue to the Western Cape
•  Technology and Information                                     Gambling and Racing Board
•  Safe and Responsible Gambling, including awareness          In terms of paragraph 1.1(q) of the Western Cape
   programmes                                                  Gambling and Racing Policy Determinations (published
•  Planning for disruptions; and                               on 12 March 1999), the Board should, as soon as possible,
•  Corporate Social Responsibility                             become financially self-sufficient.

 20                   Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22
B          OUR STRATEGIC FOCUS

The table below outlines the Board’s own income as well as the government grant as a percentage of total revenue
for these two income streams for the past five (5) years (amounts in the table below represent millions).

 Figures in millions                        2020              2019           2018            2017             2016
 Board’s own income                         40.2              38.3           34.8             38.8            34.6
 Government grant                           37.6              26.8           19.7             9.9              5.2
 Total                                      77.8              65.1           54.5             48.7            39.8
 Board’s own income % allocation            52%               59%            64%             80%              87%
 Government grant % allocation              48%               41%            36%             20%              13%

For FY2016 and FY2017, LPM Operator’s fee of R5.8 million and R6.5 million, respectively, has been included in the
Board’s own income as presented in the table above. The LPM Operator’s Fee has since expired and as a result, the
government grant allocation has increased from 20% to 36% in 2017 to 2018.

The increase in the Board’s own revenue over the past five (5) fiscal years amounts to 6%, whereas the increase in the
government grant over the same period amounts to 618%.

For the past 5 years, the government grant from the Western Cape Government, represented, on average, 3.2% of the
total taxes and levies collected by the Board on behalf of the Western Cape Government.

The government grant is to assist in funding the loss of the Casino Exclusivity Fee as well as the Limited Pay-Out
Machine Operator Fee which are no longer payable to the Board.

With revenues under pressure as a result of the COVID-19 pandemic, many licensed gambling operators have looked
to reduce operating costs by retrenching staff and improving efficiencies. Some of the smaller operators ceased to
operate as a result of the COVID-19 pandemic and the subsequent National Lockdown. This will invariably have an
impact on the Board’s own revenue streams as the Board’s income is based on industry demand.

The Board’s own revenue is therefore under severe pressure as a result of the COVID-19 pandemic but also due to
the loss of significant income streams of the Board. It therefore follows that the Board can make greater strides in
becoming financially self-sufficient by expanding the gambling industry in the Western Cape Province in a socially
responsible manner.

b. Contribution to government revenues
Over the past five (5) fiscal years, the Board collected R3.133 billion in taxes and levies on behalf of the Western Cape
Government. Taxes and levies collected in the table below represent millions.

 Figures in millions                     2020          2019          2018           2017         2016          Total

 Taxes and levies collected               693           652           617           595             576        3 133
 Government grant as a % of taxes
                                         5.4%          4.1%          3.1%           1.7%            1.7%       3.2%
 and levies collected

The gambling industry has made a significant contribution to government revenues, gross domestic product,
investment, as well as employment. For the month of September 2020, four thousand, three hundred seventy-three
(4 373) employees have been employed across all gambling sectors in the Western Cape. Comparing the direct
employment figures to the previous month, the number of licensed employees decreased by seventy-three (73). This
trend is expected to continue as a result of the COVID-19 pandemic and the medium-tem impact of the pandemic on
the industry.

                Western Cape Gambling and Racing Board • Annual Performance Plan 2021-22                               21
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