PRESENTATION TO PORTFOLIO COMMITTEE ON TRADE AND

INDUSTRY

CHALLENGES IN GAMBLINGDate: 2nd February 2010

Delegates from the National Gambling Board (NGB)

Prof L de Vries (Board Member) 0836337395Ms N Maseti (Board Member) 0828252702Ms MAF Moja (ACEO) 0832693907Mr T Marasha (COO) 0832693931Adv T Polaki (Board Secretary) 0832693947

Office No: (012) 394-3800

The purpose of our presentation is to highlight legislative impediments that the National Gambling Board encounter in executing our regulatory mandate by implementing the NG Act No 7 of 2004, and request the Portfolio Committee to consider them in the process of reviewing the National Gambling Act

Proposed areas of improvement to enable effective enforcement of gambling in South

Africa• ESTABLISHMENT OF A GAMBLING TRIBUNAL - GAMBLING MATTERS DO NOT ENJOY PRIORITY IN

ORDINARY COURTS- GAMBLING ISSUES ARE COMPLEX AT TIMES AND

NOT EASILY UNDERSTOOD BY ORDINARY COURTS- NATIONAL LAW ENFORCEMENT AGENCIES AT TIMES

HAVE OTHER MATTERS TO ATTEND TO OVER AND ABOVE GAMBLING

• GAMBLING INSPECTORS TO HAVE PEACE OFFICERS STATUS/AUTHORITY.

CONCURRENT LEGISLATIVE COMPETENCY(National and Provinces)

- Process of amending legislation by Provinces is unilateral

- Unilateral provincial process in some instances result in provincial legislation conflicting (or not uniform with) National Act eg. EBT’s; (Electronic Bingo Terminals); CEMS; (Central Electronic Monitoring Systems; Categories of Licenses; etc.

- Resolutions taken by THE National Gambling Policy Council (NGPC) are taken as administrative decision without mechanism to enforce implementation or monitoring.

GAMBLING AS A CONCURRENT LEGISLATIVE COMPETENCY – (CONTINUED)

- INDIVIDUAL PROVINCIAL LIMITED PAYOUT MACHINE (LPM) POLICIES WHILE NGB HAS TO APPLY UNIFORM STANDARDS IN APPROVING 40 MACHINE SITES.

CATEGORIES OF GAMBLING MODESCASINO’S

A WELL REGULATED REGIME THAT HAS BROUGHT THE SOUTH AFRICAN INDUSTRY AN INTERNATIONAL REPUTATION

• NO LIMITS ON QUOTAS OF GAMBLING MACHINES & TABLES THUS INCREASE OF MACHINES & TABLES WITHOUT “SOCIO-ECONOMIC STUDY”

BINGO • FORMULATION OF DETAILED BINGO POLICY- TECHNOLOGY ADVANCEMENT BROUGHT NEW

ANGLE OF BINGO ACTIVITIES• NO LIMITATION ON NUMBER OF LICENCES

AND QUOTA PER PROVINCE• INCONSINTENCY BETWEEN CASINO AND

BINGO LICENSING CRITERIA WHEREAS THEY COMPETE FOR THE SAME MARKET.

LPM’s • PROVINCIAL LICENSING OF CEMS OPERATOR WHILE

CEMS IS NGB’s RESPONSIBILITY• INCONSISTENCY BETWEEN MUNICIPAL BY-LAWS &

GAMBLING LEGISLATION I.R.O. LPM’s (eg. BUSINESS LICENSES; PROXIMITY OF BUSINESS SITES, ETC.)

• INCONSISTENCY BETWEEN PROVINCIAL BUSINESS ACT REQUIREMENTS AND GAMBLING LAWS WITH REGARD TO LICENSING OF MACHINES.

RACING AND BETTING

“It has been our understanding since 2004 that, horseracing activities are broadly provided for in the Act, and thus would require detailed amendments at some stage particularly regulation of the sporting authority”

THIS IS TO MAKE THE PORTFOLIO COMMITTEE AWARE THAT WE STILL NEED TO DEVELOP ENCOMPASING POLICY ON REGULATION OF RACING AND BETTING ACTIVITIES

RACINGThe racing element refers to direct activities relating to horseracing eg. Breeding; handicapping; jockey etc., and are regulated by the National Horseracing Authority (NHA).

BETTINGThe betting element refers to activities relating to wagering eg. stakes; type of bets; rules of betting; etc., and are regulated by gambling regulators.

Unlike other types of sport eg. Soccer and contingencies eg., outcome of elections, gambling regulators are involved in horseracing for the following reasons:

- Horseracing is dependent on betting- racing tracks are funded from betting funds (pool funds)- racing tracks are funded from betting taxes.These are the public funds which would have been paid out as winnings (pool funds) or national benefits (government taxes)

RACING AND BETTINGROLE OF GAMBLING REGULATORS

• Determine gambling taxes (currently 6%)• Determine portion of taxes payable to racing

companies to fund racing shows (currently 3%)

• Approve betting rules• Approve stakes (wagering money)• License operators offering betting activities

(Totalizators and Bookmakers)

RACING AND BETTINGRole of National Horseracing Authority (NHA)• MAINTENANCE OF STUD BOOKS• LICENSING AND REGISTRATION OF CRITICAL AREAS• FORMULATION OF RULES ON SPORT AND BREEDING • MONITOR OF TRAINING AND RACING• OPERATION OF LABORATORY• OPERATION OF DISCIPLINARY SYSTEM• RECORDING & PUBLICATION OF DATA ON SPORT• HANDICAPPING OF HORSES• OVERSEEING TRAINING OF APPRENTICE JOCKEYS

AREAS THAT NEED REVIEW • Regulation of National Horseracing Authority (NHA)

with it’s critical role• Policy on other forms of animal racing, eg.

Greyhound racing• Open bets vs fixed odd bets i.r.o. bookmakers and

tote• Virtual Racing• National certificate of suitability to be provided for

other 3rd party operators in the industry eg. suppliers of parts to gambling equipment

AREAS THAT NEED REVIEW (continued)

• Conflicting areas between gambling laws and broadcasting laws eg. The extent to which gambling activities are broadcasted (poker tournaments) that may be viewed as inducing gambling in the country

FAFHEE• ECONOMIC IMPACT NOT KNOWN SINCE NO

STUDY WAS CONDUCTED• DEFINITION OF LOTTO AND GAMBLING

GAMES SEEN TO INCLUDE FAFHEE BUT NOT WELL ENOUGH TO BE REGULATED BY EITHER

• SOCIO-ECONOMIC STUDIES REPORT THAT THE FAFHEE GAMES CONTRIBUTE TOWARDS THE INCREASE OF IRRESPONSIBLE GAMBLING IN THE COUNTRY

FINDINGS OF SOCIO-ECONOMIC IMPACT STUDY 2009

• PROBLEM GAMBLING WAS STABLE AT 5% SINCE 2006 STUDY

• SOUTH AFRICA HAS REPUTABLE AND WELL REGULATED REGIME

• BREADWINNERS WERE MOST AFFECTED • UNEMPLOYED MALES AGED 16, 30 AND 35

PARTICIPATE IN ILLEGAL GAMBLING• INFORMAL GAMES (FAFHEE, CARDS & DICE) PLAY A

BIG ROLE IN PROBLEM GAMBLING

FINDINGS OF SOCIO-ECONOMIC IMPACT STUDY

2009 (CONTINUED)• POKER AND ON-LINE GAMES WERE

IDENTIFIED AS A BIG GAMBLING PROBLEM • LOTTERY GAMES INCREASED PROBLEM

GAMBLING THOUGH REDUCED DUE TO INTEREST LOST WHEN THERE WAS NO LOTTERY

• NOVELTY VISITS TO CASINOS DECREASED BUT REGULAR GAMBLERS INCREASED THEIR VISITS

FINDINGS OF SOCIO-ECONOMIC IMPACT STUDY 2009 (CONTINUED)

• CASINO GAMBLING REPRESENT 18% OF GAMBLERS AND LOTTO IS 84%, BUT CASINOS ATTRACT 76% OF ALL GAMBLING MONEY

• SOME GAMBLERS WERE EXPOSED TO GAMBLING FROM AN EARLY AGE BY OWN PARENTS PLAYING IN-HOUSE GAMBLING GAMES. OTHERS RECOMMEND GAMBLING AGES TO BE RAISED TO 21 YEARS

FINDINGS OF SOCIO-ECONOMIC IMPACT STUDY 2009 (CONTINUED)

• GAMBLERS FIND IT DIFFICULT TO BUDGET GAMBLING EXPENDITURE AND THEREFORE CANNOT CONTROL THEIR GAMBLING HABITS.

• MAJORITY (73%) OF GAMBLERS CONFIRM THAT THEY ARE AWARE OF THE NATURE AND RISKS OF GAMBLING

• OVERALL RESPONDENT’S VIEW IS GAMBLING IS OUT OF CHOICE AND ADVOCATE FOR FREEDOM OF CHOICE

INTERACTIVE GAMBLING - The following areas need to be re-opened for

debate once policy decision has been clarified regarding Interactive Gambling

• TAX RATE OF 6%• MAXIMUM CREDIT IN PLAYER ACCOUNTS• PLAYER REGISTRATION – NO TRANSACTION BEFORE

REGISTRATION• E-WALLET (not fully addressed in the legislation)• ADVERTISING – TV Broadcasting of gambling (not

fully addressed in the legislation)

THANK YOU!