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South Africa to tighten iGaming restrictions in gambling law overhaul

South Africa’s Department of Trade and Industry (dti) has published its national gambling policy review, proposing a major overhaul of industry regulations and the introduction of new controls to stamp out unlicensed online gambling.

It argues in favour of restructuring the National Gambling Board (NGB) as a strategic trading entity of the dti, creating the National Gambling Regulator (NGR).

The NGR would be responsible for regulatory oversight, policy coordination, research, education and awareness. It would also be tasked with developing and implementing measures to combat illegal gambling, operating the Central Electronic Monitoring System (CEMS), and helping to combat problem gambling by providing treatment for those in need.

The treatment programme will be funded by the industry through a levy, the rate of which has yet to be determined.

The dti also proposes that Limited pay-out machines (LPMs) be licensed by the NGR to ensure effective national regulation, rather than remaining the preserve of provincial governments. And while a review of stakes and betting limits for these machines was also discussed, further developments on the issue are to be brought up at a later date.

A national framework to regulate electronic bingo terminals (EBTs) should also be devised, the dti said, including limits on the overall number of bingo licences and seats, and operating times. Venues hosting the terminals would also be required to have separate entrances from public spaces such as malls.

With regard to betting on horse racing, the dti recommends that the current self-regulatory model be recognised under new legislation, with future assessment of the system to determine whether the self-regulatory model should continue or be replaced by a national framework.

“At this point a case for full regulation [of horse race betting] has not been made in the various consultative processes and the industry seems to have its processes in order,” the dti said. “However, based on the challenges raised around failure to recognise certain stakeholders, entrenched barriers to entry, proper governance and fair play imperatives, limited oversight by the state is recommended.”

The dti has also proposed measures to combat illegal gambling, such as the tightening of 'unlawful winnings' provisions to eliminate the need for forfeiture orders from the South African High Court before unlawful winnings can be seized. Unlawful winnings that have been seized would automatically be forfeited to the NGR and used to finance responsible gambling programmes.

Measures against illegal online gambling should also be strengthened by giving the regulator powers to block unlicensed gaming sites, said the dti. This should be achieved without the need to involve the country’s police, it added, although education and training of police and prosecutors should be improved to ensure that cases are successfully prosecuted.

While introducing a range of new controls, the review also acknowledges the significant contribution made by the gambling industry to South Africa’s economy in terms of taxes and jobs. Despite this, no new form of gambling will be allowed.

“The capacity to regulate online gambling currently is not adequate, but can be streamlined to prevent illegal operations,” the dti noted. “Provisions must be included to prohibit illegal winnings, with amendments to prohibit Internet Service Providers, banks and other payment facilitators from facilitating illegal gambling, transferring, paying or facilitating payment of illegal winnings to persons in South Africa.

“The prohibition will require the NGR to be vigilant in terms of alerting the institutions above of such illegal operators,” it says. “If the notification by NGR is not implemented the affected institution or facilitating body should be criminally liable in terms of the act.”

The dti believes that the policy harmonisation must be emphasised to ensure provinces amend their legislation to complement its new policy stance, with provincial governments urged to work closely with municipalities to achieve this.

These recommendations are to be accepted into the final National Gambling Policy Document to be discussed by the South African Cabinet, and ultimately passed into law via publication in the Government Gazette.

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