SA CAN PROVIDE ‘KEY LESSONS’ FOR NEW GAMBLING DISPENSATION IN THE UK

[London, 25 January 2006] In introducing a new gambling dispensation, the United Kingdom can learn from South Africa and particularly, the Western Cape.

Speaking in London to British cabinet ministers and legislators at a policy seminar hosted by the University of Salford, Casino Association of SA CE and former Chairman of the Western Cape Gambling and Racing Board, Derek Auret said that South Africa's introduction of a new gambling dispensation after 1996 had earned international respect for its policy framework, social sensitivity, and the economic benefits which the country had derived from its new industry.

" South Africa was a relatively late entrant into the world of legal, regulated gambling. This meant that we were able to learn from the mistakes and successes of other jurisdictions.

"Prior to 1996, gambling, with the exception of horseracing, was illegal in South Africa . Despite this, illegal gambling was rife and was to be found throughout the country in the form of slot-machine parlours that had mushroomed almost out of control. Thus, the public had access to some 150 000 illegal machines in sleazy venues that were in most cases associated with criminal behaviour such as drug dealing, loan-sharking, money laundering, prostitution and the like.

"Moreover, these operations provided no protection to the public in respect of the integrity of games, paid no taxes, did not address the question of problem gambling, were mostly controlled by whites and were more often than not conducted at dubious and unsafe locations.

"Today, this has been replaced by a rigorously regulated and tightly controlled industry which has created nearly 100 000 direct and indirect new jobs, has yielded over R12-billion in new investment in tourism and other amenities and facilities such as more than 5000 hotel rooms and two internationally-competitive convention centres, and in which previously disadvantaged South Africans control on average an effective 38% economic interest, as well as voting control.

"And significantly, government earns over R2.7-billion per annum in revenue from the industry. In addition, together with government, a comprehensive public-private sector partnership - the National Responsible Gambling Programme - has been developed to deal with problem gambling, a model which is now being replicated as international best practice in jurisdictions throughout the world."

Auret said that it was essential British policymakers be clear up front how they intended to leverage the public interest by legalizing casinos. A proliferation of gambling venues, for example, might well yield high levels of taxation, but would not deliver public infrastructure because the price of entry would be that much lower. Alternatively, if Britain chooses to restrict the supply of gambling and limit the number of casinos to a smaller number of larger facilities, it could expect substantial investment in tourism plant and other public infrastructure.

"Some of the lessons from the Western Cape's policy framework, which would be particularly useful to British policymakers include a regulatory authority independent of the political executive, distributing casino opportunities throughout the jurisdiction so as to attract investment and infrastructure to rural areas, ten-year geographic exclusivity in exchange for a substantial licence fee payment to the state, and a requirement that casino licence applicants provide non-gambling amenities and other public infrastructure, especially in the tourism sector.

"Ultimately, we believe there are five key lessons to be learnt from our experience in South Africa and the Western Cape :

• It is imperative that government decide early on what its objectives in licencing casinos are. These can vary from purely fiscal considerations to broader objectives such as economic upliftment of economically depressed areas - or regeneration. But the objective must be clear and potential applicants must be fully informed of these goals.
• Government must decide and inform potential applicants of the so-called 'add-ons' that it desires. In South Africa the allocation of casino licences has been viewed as an opportunity to secure much needed financial benefits for government and the broader public and the process has been demonstrably successful.
• The process must be fully transparent, fair, equitable and as comprehensive as possible. The adjudication authority, which should be provided with the maximum independence, must be clear as to the objectives that are desired and must act accordingly.
• Applicants should be kept abreast of all developments during the adjudication process.
• The ideal would be that the regulatory authority/applicants approach the process in the manner of a partnership that will endure following the conclusion of the process."

For further information, please contact Derek Auret on 082 557 6766.