South Africa Online Gambling Update

Cape Town South Africa AerialFollowing last month’s National Assembly hearing to discuss a proposed bill to regulate additional forms of online gambling, it does not appear likely that iGaming in South Africa will be liberalized any time soon.

Efforts to legalize online casino gambling, poker and equal-chance games outside of the current scope of regulation – which only covers sports betting, horse racing and lottery – have largely been at the helm of Democratic Alliance MP Geordin Hill-Lewis.

Under Hill Lewis’ Remote Gambling Act, which was first published in April, 2014, the National Gambling Board would oversee the issuing of an unlimited number of operator licenses through the country’s 10 Provincial licensing authorities.

Currently, there are just a handful of operators licensed in South Africa, with just four operators dominating the sports gambling arena, including SportingBet, Sunbet, BET.co.za, and most recently, ClickaBet.

According to Price Waterhouse Coopers, online sports betting and horse racing are projected to grow by 7.7% annually, amounting to a turnover of R5 Billion in 2019. By 2017, it expects sports betting revenue to surpass horse racing, and to be responsible for 57% of the online gambling market in 2019.

While the sports betting vertical has a strong hold in South Africa, most of the opposition to Hill-Lewis’ bill is coming from the ruling party, African National Congress (ANC), the Casino Association of South Africa (CASA), which represents brick ‘n mortar casinos operating in South Africa, and most surprisingly, the Department of Trade and Industry (DTI), which Hill-Lewis is a shadow minister of.

The DTI first expressed its position on the Remote Gambling Act in early 2015, stating that the bill was neither backed by policy or regulatory studies, and that the government was not seeking to propose legislation of any sort that legalized additional forms of online gambling.

In January of this year, the DTI released its National Gambling Policy 2016, stating again that “no new forms of gambling will be allowed at this point”, while CASA has continued spearheading scare tactics to keep South Africans from gambling online at unlicensed operators, going so far as to launch a telephone line for reporting cases of illegal online gambling. Under current gambling legislation (National Gambling Act 2004), fines and prison sentences can be imposed on both operators and bettors alike.

But like most gambling markets, there is a grey area in South Africa. In 2007, amendments were made to the National Gambling Act of 2004, calling for the additional regulation of online casino games and poker. However, these amendments were never enforced due to resistance from the Gambling Board. To this day, these amendments are waiting on high court appeals. In essence, the government doesn’t have a leg to stand when seeking to criminalize South Africans who play real money online casino games.

These days, online gambling expansion in South Africa is no more than a waiting game. Just how long this game continues remains to be seen. Hill-Lewis argues the South African government cannot afford to wait –for the sake of both the economy and South African citizens who are gambling online at unlicensed offshore casinos without any protection.

But what we do know, however, is that 2016 will certainly not be the year when online poker and casino games are regulated in South Africa.

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