South Africa in focus: A strange regulatory position

In the first part of a series taking an in-depth look at the South African gambling market, Daniel O’Boyle examines how online casino gaming in the country has thrived despite legislation that was initially designed only for sports betting.

If you visit the casino section of a betting site in South Africa, at first glance it’ll look much like any other from across the world.

But look closely and you’ll see some small differences. Live casino and draw-based games will both be far more popular than in most other markets. Alongside typical on-demand games popular elsewhere, you might see some RNG roulette wheels scheduled to spin at a certain time, without players needing to click “spin”.

It all comes back to the strange regulatory position of online gambling in South Africa.

Industry turned on its head

According to the legislation, online casino gaming in the country is not legal. So why the slots, or roulette, or draw games on licensed sites? Well officially, those are betting events, regulated more like a football match than a casino game.

Kiron Interactive co-chief executive Steven Spartinos explains that it all started with draw games.

“What happened was that the operators tried to find ways that they could introduce new products in line with existing sports betting regulations,” – he says.

And so over the last four or five years we’ve seen the whole industry almost completely turned on its head. The operators found a mechanism by which they could introduce numbers-style draw games in a way that met the regulations.

“Essentially, what they were doing, as part of the regulations, was that they could offer a contingency which was a betting event which was regulated internationally. They would often be regulated by the Gambling Commission in Great Britain. So you could bet on the outcome of these events on the basis that it was – per the law – a regulated or licensed contingency. It was betting on products that were licensed internationally. These products just took off like wildfire.”

But from there, operators expanded into live casino games under the same principle. And then, more recently, RNG table games and slots.

“They’re now taking it one step further and trying to introduce traditional casino games on the basis that they were foreign-licensed contingencies and you’re betting on the outcome,” – Spartinos continues.

Of course, in pure regulatory terms you’re betting on a casino game as sports betting. And even though that sounds really strange, that’s how it works.

“If you look at the product mix that is being offered online, it replicates any gaming site you would see internationally in terms of how you have sports and online casino.”

But those games aren’t exactly like the casino games that exist in other markets. Subtle changes need to be in place to make them permissible as betting events. In some cases, that leads to products that might appear unusual, like schedules roulette wheels.

“Now we’re seeing many that they have actual scheduled times for each spin,” BetGames sales director for Africa James Everett says. “It doesn’t matter if nobody is at the roulette table, if nobody places a bet, the wheel will still spin.”

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