The rise in illegal gambling in South Africa

During the 1970s casinos began to spring up around the country and by the mid-90s it was estimated that there were well over 2,000 establishments operating illegally all across South Africa. But with the end of apartheid there was a sudden sea change in the law.

As you’d expect from a country which has a long and complex history in many ways, South Africa’s attitude to gambling has been no less tortuous.

The very first definite legislation came into force as long ago as 1673 when all forms of gambling were banned, with severe punishments for those found to be breaking the law. It wasn’t until 1965, nearly 300 years later, that the laws were relaxed – and, even then, only slightly – as horseracing and betting on the races themselves was finally allowed. This was because it was classified as a sporting activity, not a gambling one.

During the 1970s casinos began to spring up around the country and by the mid-90s it was estimated that there were well over 2,000 establishments operating illegally all across South Africa. But with the end of apartheid there was a sudden sea change in the law.

The National Gambling Act of 1996 established a licensing system for the casinos which, it was hoped, would boost tourism and raise much needed tax revenue for a country throwing off the shackles of the old regime. The Act also permitted the establishment of South Africa’s first lottery and reclassified horseracing as a gambling activity, not a sporting one.

The rise of online gambling

While the Act did a great deal to transform gambling in the country it was only eight years later in 2004 when another piece of legislation was deemed necessary to account for the appearance of online gambling. The 2004 National Gambling Act prohibited South African operators from both offering and indulging in interactive gambling online to play casino, poker and bingo games, although sports betting was still permitted.

In 2008, moves were made to modify the law to allow the licensing of approved online casino games with the National Gambling Amendment Act. However, opposition was so strong from a number of interested parties including the owners of land-based casinos and anti-money laundering authorities that the Act never came to pass.

There was even worse news in 2010 for anyone hoping to play in online casinos when a law was passed banning all internet gambling, even where providers were located outside of the country. The penalties for breaking the law were also set at such a high level that operators, players and even those processing payments for gambling would be deterred by the fines of up to R10 million or jail sentences of up to 10 years.

A growing problem

As you’d expect from a country which has a long and complex history in many ways, South Africa’s attitude to gambling has been no less tortuous.

The very first definite legislation came into force as long ago as 1673 when all forms of gambling were banned, with severe punishments for those found to be breaking the law. It wasn’t until 1965, nearly 300 years later, that the laws were relaxed – and, even then, only slightly – as horseracing and betting on the races themselves was finally allowed. This was because it was classified as a sporting activity, not a gambling one.

During the 1970s casinos began to spring up around the country and by the mid-90s it was estimated that there were well over 2,000 establishments operating illegally all across South Africa. But with the end of apartheid there was a sudden sea change in the law.

The National Gambling Act of 1996 established a licensing system for the casinos which, it was hoped, would boost tourism and raise much needed tax revenue for a country throwing off the shackles of the old regime. The Act also permitted the establishment of South Africa’s first lottery and reclassified horseracing as a gambling activity, not a sporting one.

It’s also a financial headache for the country. According to figure put together by the governing body of land-based operators, the Casinos Association of South Africa, in 2018 the gross gambling revenue for the country dropped by 2%, something the CASA believes can be firmly laid at the door of the illegal operators. In total this amounts to around R 37, million, 36% of which would normally be heading for the government’s coffers in the form of taxes and fees.

The CEO of CASA, Themba Ngobese, has been nothing if not forthright on the subject saying that it’s a problem that “not only affects the bottom line of licensed casinos‚ but society at large‚ as tax revenues‚ employment opportunities and associated economic activities are suppressed”.

A further dimension to the issue comes from the fact that there have been links made between illegal gambling and organised crime in the country, although, when questioned, the police have said that they prioritise other more serious crimes such as armed robbery over and above breaking up illegal gambling dens.

There’s very strong evidence to suggest that many of these continue to operate in plain sight in shopping malls up and down the country. Often these appear, on the outside at least, to be perfectly respectable internet cafes and lounges. But behind their darkened windows there are banks of computers connected to online gambling networks. Many also have security guards patrolling outside to deter any unwelcome visitors.

Learning from the UK?

Reformers who believe that the best way to tackle the issue of illegal gambling think that taking a leaf out of the UK’s book may be the answer. In 2006 the then Labour government brought in a whole raft of new laws to permit gambling and set up a regulator called The Gambling Commission. This coincided with the earliest days of online gambling and this has grown to become the biggest single sector in the UK.

Gambling online has never been more popular with residents of the UK. At the best online casinos, there is something for every type of player, for example, if you check out the quantity and quality of the games at the famous 888 casino, which is being widely regarded as the best provider of online casino games, you will understand why online gambling is currently so popular. With these games being such a hit in the UK, should the South African government be considering implementing similar laws?

The games would likely be very popular, limiting the amount of illegal gambling which takes place within the country. By keeping a firm grip as well as working with the industry, not against it, The Gambling Commission has ensured that the industry is well-regulated and smooth running in the UK.

However, it would seem that South Africa is far from ready to head down this route with laws set to become even more strict that they are currently. In an amendment tabled in July 2018 by the Department of Trade and Industry it recommends a number of measures including banning dog racing, reducing potential payouts from land-based casinos and a crackdown on “hidden” entrances to gambling halls in shopping centres and arcades. To date the bill is still going through the legislative review process but it’s unlikely that any changes made to it will be major ones.

For those in favour of tighter regulations and greater restrictions on gambling it will be welcomed. For those who were hoping that a favourite pastime would soon be made easier it be a disappointment. But whether it has any effect on illegal gambling in the country remains to be seen.

Source: risingsunchatsworth.co.za

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