The Legislative Environment

The National Gambling Act was gazetted on 12 August 2004 and came into operation on 1 November 2004.

Click here to download a copy of the Act

The Objective of the Act
The objective of the Act is “to provide for the co-ordination of concurrent national and provincial legislative competence over matters relating to casinos, racing, gambling and wagering, and to provide for the continued regulation of those matters; for that purpose to establish certain uniform norms and standards applicable to national and provincial regulation and licensing of certain gambling activities; to provide for the creation of additional uniform norms and standards applicable throughout the Republic; to retain the National Gambling Board; to establish the National Gambling Policy Council; to repeal the National Gambling Act, 1996; and to provide for matters incidental thereto.”

Extension Of Regulatory Oversight
The Act contains a significant extension of regulatory oversight functions for the National Gambling Board and introduced a number of measures aimed at addressing the incidence of problem gambling.

The Act provides for:

  • The protection of minors
  • Restrictions on granting credit to gamblers
  • Self-exclusion from gambling activity by individuals
  • Restrictions on advertising and the promotion of gambling activities and the granting of promotional discounts
  • The enforceability of gambling debts.

Registration and monitoring
Provision is made for the registration and certification of gambling machines and devices, and for the establishment of a national central electronic monitoring system. There are also provisions for the licensing of persons employed in the gambling industry.

Licensing Norms and Standards
Part D of the Act stipulates licensing norms and standards. These are augmented in Part E, which provides for the consideration of economic and social development issues (including black economic empowerment and combating the incidence of addictive and compulsive gambling), and competition issues.

New Policy Structures
Provision is made for the establishment of a National Gambling Policy Council and a National Gambling Board.

Cautionary Notices, Credit and ATMS
In terms of the Act, cautionary notices will have to be posted on licensed premises and on gambling advertisements. The use of credit is banned, as is the placement of ATMs on casino gambling floors.

CASA’s Role in the Act
CASA, on behalf of the industry, was able to make submissions and representations to the Department of Trade and Industry, the Portfolio Committee on Trade and Industry and the National Council of Provinces on the draft Bill, and most of its submissions were incorporated into the Act.

Thoughts on the National Gambling Act

The legalisation of gambling by the Government in 1996 through the passage of the National Gambling Act of that year highlighted two important changes in Government thinking:

  1. Firstly, that gambling was a leisure activity that was considered to be desirable by a significant percentage of the population of South Africa and that as a free and democratic country its citizens should enjoy the right to choose whether or not they wished to participate in this form of entertainment.
  2. Secondly, that the significant number of illegal gambling operations in any event provided that form of entertainment to large numbers of people but that the continuation of such operations – which criminalised participants when caught – was undesirable for a number of reasons: as recently as 1995, there were about 150 000 illegal slot machines in South Africa, paying no tax, employing few people and providing a platform for associated criminal behaviour such as prostitution and the narcotics trade. Moreover, this vast illegal industry was almost entirely controlled by whites, offered players no protection against fraud, was accessible to minors, and ignored problems associated with compulsive gambling.

1996 – The rebirth of South African Casino Gambling
The 1996 Act thus recognised the maturity of the individual in South African society to decide for him/herself and to provide freedom of choice and to eliminate widespread illegal gambling and its harmful consequences. Following the adoption of the Act, its implementation brought into being a number of regulatory authorities, a structure of provisions that would make the industry the most highly regulated economic sector in the country and the establishment of casinos that are recognised as some of the best operated in the world.

A World Class Industry
For its part, those companies that obtained licenses to operate casinos in turn presented the country with significant job creation and new revenue in the form of taxes and levies, tourism and other infrastructure, and, perhaps most significantly, with a system to address problem gambling. This initiative has evolved into a comprehensive government/private sector programme that is recognised worldwide as being a leader in its field and has been implemented also in other international jurisdictions.

Gambling’s Growing Acceptability
By its very nature, gambling in some sectors of society remains a controversial issue, although independent research commissioned by the National Gambling Board shows that 73% of South Africans believe gaming is acceptable, and 89% do not have a moral, philosophical or religious objection to this form of entertainment. About one in eight South Africans (12.2%) are opposed to gaming, while the rest may choose not to gamble, but have no objection if others do so.

Casino Gambling’s Detractors
Despite the adherence to, and compliance with, all license conditions and other corporate governance and citizenship protocols by South African casino operators, there has been some criticism accompanying the advent of this newly legalised form of entertainment. In this regard it is significant to note that despite the best efforts of the industry to contain and address the possible harmful effects of gambling, its detractors relied heavily on anecdotal evidence to attempt to discredit this form of leisure activity and to introduce measures to circumscribe it for social reasons.

The Revision of the Act
The impact of the objections of this relatively small, but persistent, sector of society ultimately gave rise, early in 2004, to proposals to revise the 1996 Act. The initial drafts of the Bill were not made available to the industry and it was only when it had reached its 11th draft that operators were finally given the opportunity to comment on its provisions. In the event, that which was being proposed would result in a reduction of the operating level of the industry, a large number of job losses and a significant reduction in revenue, as was later demonstrated, but would not have eliminated the choice that citizens had to exercise their right to choose their leisure activity.

New Compliance Provisions
The Act that was finally adopted has added a number of new measures to an already long list of compliance provisions that is required of the industry and with which it scrupulously complies. These relate in the main to provisions regarding the exclusion of individuals from casinos, the positioning of ATMs within properties, signage directing persons who visit a casino away from areas where gambling actually takes place (although why persons would visit a casino if they object to seeing gambling devices has never been explained) and advertising.

Difficulties with Drafting the Act
A number of difficulties arose with the process leading up to the final Act. Among these was the fact that the various drafts of the Bill had not been evidenced-based, that no research had been conducted into international best practice or the insights of experts in the field into the areas that it sought to address, and that industry had not been consulted or given the opportunity to comment on the proposed provisions until a very late stage.

At that point industry, which has throughout recognised the need for regulation, and has co-operated extensively with all regulatory agencies throughout its operational life, engaged Government to create a better understanding of the consequences that the adoption of the Bill would have on economic activity that had been established over a period of six years.

The Casino Industry’s Contribution to Society
It is worth noting – and this was put to Government – that the casino industry in South Africa was already, at the time of the new Bill, a rigorously and effectively regulated legal industry that contributed substantially to the public purse and which had extensively funded public infrastructure, including new tourism plant, such as convention centres and more than 5 000 hotel beds.

In just seven years our new casino industry, which today has some 20 000 slot machines, has been responsible for more than R12-billion in new investment that has added more than R36-billion to GDP in terms of economic multipliers.

It has created almost 100 000 direct and indirect jobs and in 2003/4 alone it accounted for nearly R1.3-billion in provincial gaming taxes and VAT which, together with company tax, contributed more than R1.7-billion to government revenue.

It has also substantially advanced transformation in the tourism and leisure industry. On average, 60% of voting control in the casino industry is held by previously disadvantaged shareholders, as is a 38% effective economic interest. Fulfilment of our black economic empowerment obligations through recruiting, procurement and outsourcing is audited regularly by the authorities.

Another Layer of Regulation
As a consequence of the new regulatory environment in the country after 1996, casinos are subject to tight controls in terms of player protection, the exclusion of minors, probity standards and other compliance measures, including industry’s substantial funding of the National Responsible Gambling Programme.

The Act, subsequently passed, has added another layer of regulation to the already rigorous conditions under which the casino industry operates. As already indicated, industry does not quarrel with the need for regulation and, as its track record over the past number of years clearly indicates, has complied in every respect with imposed conditions. It recognises that gambling can create problems for a small number of people and has redoubled its training and preventative measures to address this issue.

Industry also acknowledges the co-operative spirit that characterised discussions leading up to the final draft that was ultimately adopted.

A Call For Continued Dialogue
Industry however, through its proven positive economic contribution, also considers itself to be an important part of the economic fabric of South Africa. It thus despairs when proposed actions against the industry hinge on personal whims and anecdotal examples presented by the opponents of gaming as the norm. For its part, industry will continue to live up to its enviable reputation as a contributory and ethical corporate citizen. Its view is undeniably that, as far as the regulatory environment is concerned, Government has gotten it right.

It is only through consultation, research and regular interaction between all stakeholders that the industry will be able to continue to present gambling for what it ought be: a form of entertainment that can be enjoyed by all.

The National Gambling Regulations

On 13 September 2004 the Department of Trade and Industry, in terms of the Act, published the National Gambling Regulations for comment. The regulations were formally promulgated on 15 November 2004.

Click here to download a copy of the National Gambling Regulations.

The regulations contain provisions dealing with excluded persons, minimum requirements for advertising material and responsible gambling messages, the extension of credit, standards for gambling premises, and the registration and certification of machines and devices.