Introducing the National Gambling Bill, 2003
Select Committee
Cape Town
3 September 2003
Overview of presentation
• Background to Bill
• Objectives and principles of new Bill
• Overview of the industry
• Scheme of the Bill
• Detailed overview of the Bill
Background
• Why a new Bill?
– Amendments proposed to Gambling Bill in 2000 and agreed at MinMec in 2001
– Drafting reformulations recommended for greater clarity
– Several fundamental issues currently in regulation better supported by legislation
– It is desirable to consolidate the law
New provisions introduced
• Bill reenacts existing provisions and introduces new ones– Outlaws certain activities and all unlicensed gambling
activities– Introduces prohibitions, requirements and standards to
address problem gambling– Introduces a system of registration of gambling machines
to deal with illegal gambling– Clarifies single national electronic monitoring system– Introduces a system of national licenses– Establishes norms and standards for provinces– Establishes the National Gambling Policy Council
Objectives of changes
• To clarify concurrent national/provincial jurisdiction
• To give effect to co-operative governance
• To provide for economic unity
• To ensure tighter control over gambling, especially illegal gambling
• To recognize the potentially negative socio-economic impact of gambling and the public policy objectives and to put in place mechanisms to deal with this
Consultation
• Extensive consultation with provinces, as main issues related to clarification of jurisdiction – Bill reflects agreement with provinces and PLAs
• Bill published for comment, but only 3 weeks (18 August) given for comment due to Parliamentary requirements - comments still accepted up to 29 August (effectively 5 weeks)
• Workshop held with industry and public interest groups
• Comments incorporated and Bill circulated to interested parties to prepare for public hearings due to short publication period
Overview of the Gambling Industry
Background
• Gambling was legalised in 1994 on the basis that it was not possible to outlaw gambling and that it be better controlled if it was regulated;
• In this context, four public policy objectives were identified:
– BEE– Employment creation– Creation of new fixed investment and infrastructure– Generation of revenue
Overview of the Gambling Industry
Size of the industry
• The gambling industry, including the National Lottery, currently generates about R6.8billion in gross revenue every year;
• Total revenue for government from gambling (excl lotteries) is just under R500 million per annum;
• Most popular forms of gambling:– Casinos (70% of GGR), Horseracing (17% of GGR),
National Lottery (13% of GGR), Bingo (less than 1% of GGR), LPMs?
Overview of the Gambling Industry
Meeting the public policy objectives
• BEE: 43% equity holding by empowerment companies; however, difficulties arising from financial arrangements
• Employment: estimated 50,000 direct and indirect jobs– Gauteng (13,500), Eastern Cape (7000), Freestate (2000), North
West (1000)
• Revenue Generation: R492 million (March 2002) gross revenue
Gauteng (58%), Eastern Cape (12%), Western Cape (12%), KZN (10%), remaining provinces account for 8% of revenue
• Infrastructure: R11.7 billion in investment
Overview of the Gambling Industry
Problem gambling
• No of problem gamblers as a proportion of regular gamblers is about 50% higher than in developed countries
• Incidence of problem gambling 1% of population with easy access to gambling activity
Canada (1.6%), Australia (2.3%), New Zealand (1.3%), UK (0.8%)
• Need for proper control, especially over illegal gambling, protection of minors and monitoring of social impact
Overview of the Gambling Industry
Legal framework and administration
• Concurrent jurisdiction has resulted in contestation and legal challenge
• Duplication of functions, hampering economic activities occurring on a national level
Scheme of the Bill
Policy Council NGB
Policy making
Review proposals for NNS & Regulations
Dispute resolution
Consultation
National legislationNational legislation
StructuresStructures
Policy Advice
Propose NNS
Review NationalLicensing
Maintain CEMS
Monitor NNS
National registries
Council Secretariat
Functions
Provincial LegislationProvincial Legislation
StructuresStructures
9 PLA’s
Functions
Licensing ito prov. law
Policy maMonitoring of machines
via CEMS
National licensing ito national law
subject to NGA review
Maintenance of data registriesrequired by national law
Inspection & enforcement of all National & Provincial law
in provinces
DTI
Promulgate regulations
Develop legislation
Disclosure &reporting
Questions and clarification
Detailed overview of National Gambling Bill, 2003
Chapter 1: Interpretation and Application
• Definitions• Application: does not apply to Lotteries
Chapter 2: National Gambling Policy
Part A: Gambling Activities
• Defines – gambling activity generally;
– bests and wagers;
– gambling games;
– pay-outs and opportunities to play further
Chapter 2: National Gambling Policy
Part B: Prohibited gambling, restricted activities and status of gambling debts
• Prohibits illegal gambling; all unlicensed gambling activities except for informal bets; unlicensed dealing in machines or gambling devices; use of unlicensed premises; unauthorised interactive gambling; gambling by minors; credit for gambling;
• Provides for voluntary exclusion and imposes requirements
Chapter 2: National Gambling Policy
Part B: Prohibited gambling, restricted activities and status of gambling debts
• Places restrictions on advertising
• Provides for enforceability of debts through legal gambling activity (unenforceability of debts by minors and excluded persons)
Chapter 2: National Gambling Policy
Part C: Gambling Premises
• Standards for gambling premises– Introduces new provisions to address concerns related
to the overstimulation of gambling (proximity to schools, having a cash machine on the premises, notices)
• Sites for LPMs (currently in regulation)
Chapter 2: National Gambling Policy
Part D: Registration and certification of machines and devices
• Requires registration and identification of gambling machines or devices
• Provides for national register of machines and devices and their registration
• Provides for transfer of ownership or possession• Requires testing agents to be licensed• Calibration and certification of machines and devices• Regulations for LPMs• Requirement for LPMs to be linked to CEMS
Chapter 2: National Gambling Policy
Part E: Licensing of persons employed in gambling industry
• Requires all employees to be registered
Chapter 3: Jurisdiction and Licensing
Part A: Jurisdiction
• Outlines jurisdiction and responsibilities of PLAs and NGB
• Clarifies oversight function of NGB
• Requires PLAs to keep and share information
• Provides for conflicts in concurrent jurisdiction
• Provides for Ministerial powers to make regulations iro norms and standards
Chapter 3: Jurisdiction and Licensing
Part B: National Licenses
• Authority of national licenses• Applications for a national license• Authority to issue a national license• National license procedures• Review of refusal to issue national license• Review of proposal to issue national license• Suspension and revocation of national license
Chapter 3: Jurisdiction and Licensing
Part C: Provincial Licenses
• National norms and standards• Maximum number of casinos licenses (by regulation,
with transitional measures)• Limitation of rights of a license• Amusement games and machines
Chapter 3: Jurisdiction and Licensing
Part D: Licensing Norms and Standards
• License criteria, categories and conditions• Disqualification for employment licenses• Disqualification and restrictions for other licenses• Disqualification after license issued• Acquisition of interest by disqualified person
Chapter 3: Jurisdiction and Licensing
Part E: Additional Norms and Standards
• Economic and social development issues to be considered and conditions to be attached – BEE, overstimulation of gambling to be considered in
license renewal annually; consistency with Liquor Bill
• Competition issues to be considered• State interests• License requirements, acquisitions and transfers
Chapter 3: Jurisdiction and Licensing
Part F: License Investigations, decisions, transfer and surrender
• External probity reports• Decisions• License transfers• Surrender of license
Chapter 4: National Structures
Part A: National Gambling Policy Council
• Establishment, functions and meetings
Part B: National Gambling Board
• Continuation, objects and functions, provincial relations, composition of Board, conflicting interests, resignation and removal from office, meetings of the Board, Committees, Remuneration of Board and staff, finances and accountability
Chapter 5: Enforcement and Offences
• National Inspectorate• Functions and powers of inspectors• Breach of confidence• Hindering administration of Act• Self-incrimination• Failure to comply• Offences and breaches of license condition• Penalties• Serving documents• Proof of facts
Chapter 6: General Provisions
• Regulations
• Repeal of laws and transitional arrangements
Schedule 1: Transitional Provisions
• Definitions• General preservation of rights• State interests• National Gambling Board• National Licenses• Development of interactive gambling policy and
legislation• Transitional maximum no of casinos• Excluded persons
Questions and clarification