National Gambling Amendment Bill [B31b-2007]: briefing
NCOP Economic and Business Development
10 October 2007
Meeting Summary
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Meeting report
ECONOMIC AND FOREIGN
AFFAIRS SELECT COMMITTEE
10 October 2007
NATIONAL GAMBLING AMENDMENT BILL [B31B-2007]: BRIEFING
Chairperson: Ms N Ntwanambi (ANC,
Western Cape)
Documents handed out
National Gambling
Amendment Bill [B31B-2007] as amended by the Portfolio Committee
National Gambling
Amendment Bill [B 31-2007] as introduced into Parliament
National Gambling
Amendment Bill presentation
Explanatory
document for presentation on Interactive Gambling
Audio
recording of meeting
SUMMARY
The
Department of Trade and Industry explained that the National Gambling Amendment
Bill aimed at regulating interactive gambling. Interactive gambling refers to all forms of remote gambling taking
place via the internet or other related forms of telecommunication. Internet gambling
was a reality in South Africa, and this sector of the industry was not yet
regulated. Players would be protected from dishonest and unfair practices.
Money that was being spent outside of the country would remain in South Africa.
Players would be registered, thus denying access to minors while enable the
monitoring of problem gamblers. Attention would be given to implementing Black
Economic Empowerment and socio-economic upliftment
principles. Operators would have to comply with the provisions of the Finance
Intelligence Centre Act. Advertising of service providers would be limited. The Department said that interactive gambling did not affect poor communities as they did not have
access to internet facilities.
The main issue raised by members was how gambling affected poor communities.
Some felt that gambling added to the moral breakdown in society. They also felt
that some people could easily gamble away their earnings.
MINUTES
Department of Trade and Industry (DTI) briefing on National Gambling Amendment
Bill
Mr
Brian Muthwa (DTI Director: Legislative Drafting) said that the Bill was to provide for the regulation
of interactive
gambling so as to protect society against
the over-stimulation of the demand for gambling. It provided for the regulation
and verification of players as well as for the protection of minors and other
vulnerable persons from the negative effects of gambling. It would ensure
compliance with the Financial Intelligence Centre Act (FICA) and other relevant
legislation. It also aimed to prevent gambling from being associated with
crime, money laundering or financing of terrorist and related activities.
Their approach to regulating interactive gambling was to introduce it by way of an amendment to the National Gambling
Act as opposed to a separate piece of legislation. DTI believed that interactive
gambling should form part of the broad
policy for the regulation of all forms gambling and be subjected to the general
administrative and oversight role of the National Gambling Board rather that
creating a separate regulatory authority for interactive gambling.
The existing regulatory regime in terms of the National Gambling Act largely
applied to all forms of gambling including interactive gambling.
He said that the National Gambling Act of 2004 required the Minister to
introduce into Parliament within two years of the effective date, legislation
for the regulation of interactive gambling. A research committee was established by the National Gambling Board
(NGB) to investigate the implications of the regulation of interactive
gambling within the Republic. The
research report was finalised in October 2005 and tabled before the National
Gambling Policy Council (NGPC) which recommended enabling legislation. The
draft Bill was approved by Cabinet in December 2006 and published for public
comment on 18 December 2006.
Approximately 20 public submissions had been received. Issues around licensing,
location of server, money laundering, player protection and problem gambling
were raised. Most of these issues were incorporated into the final draft of the
Bill. The Bill was then submitted to the State Law Advisors by the end of June
2007 and introduced to the National Assembly on 26 July 2007.
The initial presentation to the Portfolio Committee on Trade and Industry took
place on 8 August 2007. Public hearings were then held in August 2007. The Bill
was amended in light of inputs from the Portfolio Committee on Trade and
Industry and stakeholder comments. The Bill was adopted by the Portfolio
Committee of Trade and industry on the 5 September 2007 and by the National
Assembly on 11 September 2007.
The National Gambling Board, Provincial Licensing Authority, National Treasury,
South Africa Reserve Bank, South Africa Revenue Service, industry role players
(such as the Casino Association of South Africa), the National Responsible
Gambling Programme and Problem Gamblers Anonymous were the stakeholders
consulted before the Bill was introduced.
The stakeholders that made comments at the public hearings included industry
role players (Casino Association of SA, Betfair), Provincial Licensing
Authorities (Gauteng, Western Cape, Mpumalanga), National Departments (National
Treasury, Financial Intelligence Centre). As well as churches (Jewish Board of
Deputies, Justice Alliance of SA), COSATU, National Responsible Gambling
Programme and South African Advisory Council on Responsible Gambling.
The key issues raised in the public hearings included the adequacy of the
consultation process, money laundering and taxation. In addition to that,
issues around person to person betting exchanges, advertising, licensing powers
of the NGB, curbing of gambling in this country and problem gambling were also
brought up.
Mr
Brian Muthwa then went through the scheme of the Bill. This included the provision of
interactive gambling games, player protection, advertising, licensing,
compliance and enforcement, problem gambling, money laundering and taxation.
With regards to the provision for interactive gambling games, the Bill
established a legal basis for the provision, regulation and control of
interactive gambling within the Republic. In terms of player protection, it
proposed for the registration of players. The establishment of player accounts
for the payment of monies. It prohibited South Africans from engaging in
interactive gambling activities provided by providers not registered in the
Republic. The Bill dealt with the method of payment of wagers and prizes to
players and remittance to foreign players and external companies. Hence there
would be strict control of interactive providers. Interactive gambling
providers were not allowed to extend credit to a player. With regards to
advertising, the Bill proposed the prohibition of all interactive gambling
advertising and promotion within the Republic.
Interactive gambling licences were to be issued as national licences which
included the operator licence and employee licences. There was also the
licensing, testing and certification of interactive gambling software and
equipment.
The NGB was responsible for ensuring compliance with the Act, licence
conditions and FICA as well as to conduct inspections in respect of interactive
gambling websites and premises where interactive gambling equipment and
software was located. The NGB may revoke or suspend interactive gambling
licences for non-compliance. The server was to be located in South Africa. NGB
may delegate some of its enforcement and compliance power to the Provincial
Licensing Authorities.
In terms of problem gambling, the Bill proposed that there be an electronic
system for monitoring and reporting of registered players. Players must also
set limits on their accounts. Providers were to audit playing patterns and
behaviour. Also suggested was a self-diagnosis system. There should also be a
notice on the website of the interactive gambling provider in respect of
voluntary player exclusion and treatment of addictive gambling (National
Responsible Gambling Programme)
To avoid money laundering, the registration of players and verification of
player identity was proposed. Winnings were to be transferred to nominated
accounts held with authorised financial institutions only. Funds were not to be
converted into any other form of value.
External companies must have a physical presence in South Africa so records of
transactions were located here. Interactive gambling providers were obligated
to report suspicious and illegal activities.
In terms of taxation, the Bill included a provision that allowed for taxation
which would be catered for in a separate money Bill by the Minister of Finance.
Tax was to be considered for use in curbing the extent of gambling.
In conclusion the regulation of interactive gambling would ensure
accountability and transparency as well as the protection of players.
Discussion
Mr N Hendricks (ANC) said that gambling was a massive social
problem. He said that it was very easy
for people to gamble away their savings
Mr Sibiya (ANC) asked what monitoring role the National Gambling Board would
have. With reference to the National Responsible Gambling Programme that dealt
with addiction, what measures were in place to prevent addiction?
Mr Gumede (ANC) asked what percentage of winnings would be taxed. He also asked
how the DTI consulted with the public, especially those in the rural
communities.
A member commented that this amendment bill was aimed at people in privileged
areas.
The Chairperson pointed out computer-literate women sitting at home who had
access to online computers, gambled at home.
He noted that the majority of women in casinos were women.
Ms Themba (ANC) asked what the outcome was of the public hearings held in
August 2007.
Mr Muthwa answered that interactive gambling was only accessible to people who
had internet access as well as credit cards. This fact excluded many people and
he did not feel that it would affect the poorer communities. Due to time
constraints, the other questions were not answered.
The meeting was then adjourned.
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