South Africa Online Gambling Ban Stirs Debate

Posted on: November 1, 2014, 08:50h. 

Last updated on: October 31, 2014, 08:19h.

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Expertise: Commercial Gaming.

South Africa’s government is proposing a ban on a wide range of gambling activities, including all forms of online gambling and other activities such as dog racing. That proposal is being discussed by the National Gambling Policy Council, which features members from both the national and provincial governments, as well as the Department of Trade and Industry.

According to department officials, the government believes it has the capability to enforce regulations on gambling, and that it is unclear how many jobs are created by the online gambling industry. It would also hardly be an unprecedented move, as many other jurisdictions around the world have outlawed Internet gambling in the past.

Democratic Alliance Favors Regulation Over Ban

But while some government officials were enthusiastic about the prospect, the idea of an outright ban was strongly denounced by the opposition Democratic Alliance.

“That is a very, very bad decision,” said DA trade and industry spokesperson Geordin Hill-Lewis. “I fiercely disagree with that view. It is completely shortsighted to say that it is better for South Africans not to be allowed to gamble online when there is patently significant demand in the country to do that. It is for government to facilitate that in the safest way possible.”

In other words, the DA position is that online gambling is better controlled through regulation, rather than an outright ban. A full ban, Hill-Lewis said, would cost far too much in resources to enforce.

But Department of Trade and Industry Deputy Director-General Zodwa Ntuli said that the specific circumstances in South Africa meant that a ban would be good public policy. She pointed out that the department’s proposal was made after recognizing that South Africa had a relatively high level of problem gambling and debt compared with many nations.

Electronic Bingo Terminals Would Be Limited

If the department’s recommendations were to become law, it wouldn’t trigger a widespread ban of all gambling activities in the country, but would rather limit what would be allowed of the traditional forms of gaming that are already present in South Africa. There would also be further controls placed on electronic bingo terminals, which are currently allowed by provincial governments, even though there is no national policy on the machines.

That conflict caused Trade and Industry Minister Rob Davies to issue a moratorium on any further licenses for the machines. The new recommendations would see a cap on the number of machines allowed nationwide. It would also try to control the ease of access to these machines, with officials saying that gambling shouldn’t be allowed in shopping malls, for instance.

The new regulations would also include a framework for allowing the government to better oversee the horse racing industry. While few details were available, it appeared that the most significant changes there would come in the issuing of licenses, a process by which the government could affect change in the industry.

Gambling regulation in South Africa is similar to that of the United States and Canada, at least in terms of the interplay between federal and local governments. While the federal government sets national policy, it is up to individual provinces to decide how each will issue licenses and collect revenues from gambling activities.