Committee: Yes To Legal Internet Gambling
Published: Friday, December 23, 2005 Online-Casinos.com
SOUTH AFRICAN ADVISORY COMMITTEE URGES LEGALISATION OF INTERNET GAMBLING
"It's a phenomenon that is almost unstoppable," gambling chief says.
Good news from the Financial Mail in South Africa is that a special investigative committee set up by the national Gambling Board to review and make recommendations on Internet gambling has recommended that it be legalised.
The committee has travelled and canvassed professional views extensively, one of its advisers being eCOGRA CEO Andrew Beveridge.
Internet gambling in SA is currently illegal, and raids have been carried out, particularly in the Eastern Cape province where authorities have tended to be more active in enforcing the ban.
Online gambling will become legal if Trade & Industry minister Mandisi Mpahlwa accepts the recommendations of the national gambling board. In a report on the regulation of interactive gambling, the board has recommended that Internet gambling be legalised.
Online gambling in SA (population 42 million +) remains the preserve of a relative few - those who have regular access to the Internet. The Financial Mail reports that only one in 10 households has a fixed telephone line and, of 361 calls made to a hotline operated by the national responsible gambling programme in the three months to end-September, only two related to Internet gambling.
The country has a sophisticated communication and IT infrastructure and is home to many of the industry's leading entrepeneurs. The use of cell phones is widespread and growing.
If Mpahlwa opts to legalise Internet gambling, SA companies stand to profit from an industry that is enjoying rapid growth. The industry was worth US$3 billion/year in 2001 and had grown to more than $8,2 billion/year in 2004, according to research firm Christiansen Capital Advisors. The market is expected to triple to almost $25 billion/year by 2010.
National gambling board CEO Thibedi Majake says there was little option other than to recommend that online gambling be legalised. "It's a phenomenon that is almost unstoppable," he says. He admits that SA punters are already placing bets online, and there's little that can be done to stop them.
The board's report says that legalising online gambling will address several issues: local gamblers will have legal protection; it will prevent "criminal influence and exploitation" in the industry; and it will promote the development of an interactive gambling industry in SA.
If Mpahlwa gives the go-ahead, legalisation could take place quite quickly. Majake says no new gambling legislation would be necessary . The only requirement would be new regulations to govern it.
Operators will probably pay an annual licence fee of R150 000 (approximately US$ 24 000). Proposed licensing conditions are not out of step with those imposed on land-based casinos. Other regulations will apply: online operators will have to comply with the Financial Intelligence Centre Act (Fica); they will have to submit to monitoring of their systems by the gambling board; and they will have to pay a sensible 2 percent tax on gambling revenue.
UK-based group Betfair is just one international group reportedly interested in the South African market. Betfair SA public affairs manager Richard Rumbelow says the board's recommendations are "very fair and reasonable" and go some way to attracting the "right type" of international gambling company to invest in SA.
Majake and Rumbelow both say that, given South Africa's rapidly growing call-centre infrastructure, the country is well placed to provide back-office support for Internet gambling operators wanting to set up operations here. This, coupled with the board's recommendations, could help establish SA as one of the leading destinations for Internet gambling .
