All the hopes regarding the potential liberalization of the South Africa’s online gambling market operators might have ever had were shattered last week when the Department of Trade and Industry released the final version of its National Gambling Policy 2016. The policy states that “no new forms of gambling will be allowed at this point” and argues the decision as a way to “protect gambling activities that create jobs from unwarranted competition.
Not only that the liberalization of the market will not takes place, but the government also plans to tackle widespread illegal online gambling activities. The amendments requiring the prohibition of access to illegal gambling sites by internet service providers are proposed to the National Gambling Act while, at the same time, banks and other financial institutions should stop processing online gambling payments. One of the planned activities is the reorganization of the National Gambling Board and its transformation into the National Gambling Regulator (NGR). The new institution is expected to be “vigilant in alerting” banks and providers of illegal online operations. If these subjects ignore the notifications by the NGR and do not prohibit illegal activities, they will be “criminally liable” for providing their services.
Improving the inspectorate capacity by provincial licensing authorities is another step, as illegal gambling offences have not received the necessary attention so far due to South Africa’s overburdened police and court resources. From now on, prosecutors should be presented with better collection of evidence. As the “last resort” option the policy suggests that an independent tribunal should be established with the priority of enforcing penalties for illegal gambling. The tribunal would be funded by the government, tax revenues on domestic gambling operators as well as by the penalties imposed on illegal operators and on ISPs and banks caught eluding the restrictions.
When it comes to players gambling at illegal online casinos, the government plans to confiscate all winnings and to transfer them into the Unlawful Winnings Trust. According to the current regulations, High Court must issue an order for winnings to be seized, but the new policy allows immediate confiscation providing the NGR can prove that the gambling activity is illegal.
At this moment, only online sports betting is allowed in South Africa while online casino, poker and other games of chances are forbidden. The new document underlines that the consolidation is needed in order to curb the illegal gambling operations as the capacity to regulate it is currently inadequate.