By Sihle Bulose and Zanrie Linstrom
If you are an avid sports fan, you cannot help but have noticed the rise of sports betting over the past few years. Companies in the sector sponsor some of South Africa’s biggest tournaments, professional teams and stadiums. They also advertise extensively and have moved beyond straightforward betting, releasing a host of gaming products that mirror the mechanics of online casino games.
However, the same is not true of online casinos in general. There are no big sponsorships, no averts on billboards, prime time TV slots or even in your social media feed. The reason for that is because, while online sports betting is legal in South Africa, online gambling (save for sports betting) is not. That, in turn, is down to a piece of legislation that has been locked in stasis for the best part of 16 years.
The delay means that South Africa has not developed an online gambling industry, save for sports betting. In the intervening years, however, players in other parts of the world have built substantial operations, with the global casino market worth in excess of $60 billion (R1 trillion).
Understanding the legislative delay
The legalisation and regulation of interactive games was initially provided for in the National Gambling Amendment Act, 2008 (2008 Amendment Act) which was approved by the National Assembly in July 2008. However, its commencement date is yet to be proclaimed by the president.
In light of the delay in the commencement of the 2008 Amendment Act, a private members bill, the Remote Gambling Bill, 2024, has been introduced to Parliament and is before the National Assembly. The Remote Gambling Bill aims to regulate interactive gambling and provide uniform norms and standards in respect of remote gambling.
The 2008 Amendment Act was intended to amend the National Gambling Act, 2004, which allows for online betting but not gambling. The act provides that no one may participate in or make available interactive games unless they are authorised to under the act or other national legislation. It defines an interactive game as a gambling game that can be accessed only over the internet, other than games that can be played only within licensed premises.
A gambling game is a game in which a participant pays consideration, with the chance that the participant might become entitled to or receive a payout. The outcome of a gambling game is dependent on the skill of the player or chance (or both). The main difference between sports betting and the forms of interactive betting not permitted is the fact that sport betting outcomes depend solely on chance (as opposed to the skill of a player).
Accordingly, any online bets placed on events with uncertain or unknown outcomes (such as sports betting), are not prohibited. In essence, placing bets on uncertain outcomes, like the results of a football match, can be done remotely over the internet. However, an online card-based game that one would usually play in a casino (where there is consideration paid for a potential payout), would usually be classified as a prohibited interactive game.
In Casino Enterprise versus Gauteng Gambling Board, the Supreme Court of Appeal has ruled that internet casinos based in other countries that make gambling games available in South Africa contravene section 11 of the act.
The Remote Gambling Bill aims to eliminate that discrepancy by categorising all forms of betting that take place through remote communication (internet, cellphone, radio, television and so on) as remote gambling. That includes gambling on virtual gambling games, engaging in person-to-person gambling, equal chance gambling, gambling games and sports betting. The Remote Gambling Bill deals with all forms of gambling in a uniform manner, irrespective of whether such gambling takes the form of online betting or other types of online gambling.
The Remote Gambling Bill will apply to any provider who makes remote gambling activities available within South Africa even if the remote gambling equipment is outside the country, as well as any player situated outside the country that has registered as a player with a South African remote gambling operator. This is consistent with the findings of the court in Casino Enterprise versus Gauteng Gambling Board.
Winning and remittances
The Remote Gambling Bill and the act make provision for paying out prize money to international players and for South Africans to be paid out if they win on an international site, subject to exchange control regulations and tax legislation.
The operator is required to hand over the funds to the state. The Remote Gambling Bill provides for a similar process in respect of monetary prizes and non-monetary prizes, where there is no player account.
The Remote Gambling Bill, on the other hand, provides for the issuing of interactive gambling licences by the relevant provincial authority where the applicant’s place of business is or will be located.
Despite the issuing of provincial licences under the Remote Gambling Bill, a licence holder will be allowed to make remote gambling activities available outside the province where they hold a licence, and persons situated outside said province or even outside South Africa may register as players. This would allow interactive gambling providers to choose a provincial authority where from they wish to apply for a licence and set up their business in that province.
Vital certainty
Regardless of whether the 2008 Amendment Act or the Remote Gambling Bill is passed first, signing either into law would provide critical certainty. It would also allow for the establishment of South African online casino companies capable of competing in one of the world’s fastest-growing industries.
* Bulose is the director and Linstrom is a candidate attorney at Corporate and Commercial, CMS South Africa.
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