SWAZILAND ONLINE GAMBLING FIRM APPEALS S.A. LEGALITY DECISION
Extra-territorial Internet gambling legality issue to be heard in Supreme Court of Appeals
The South African online gambling legal scene is warming up this week with news that permission has been given for a key civil case to be heard in the Supreme Court of Appeals in the judicial centre of Bloemfontein. On Thursday 8th February, in the High Court of South Africa the Honourable Judge Hartzenberg granted Piggs Peak Online Casino leave to appeal an earlier November ruling.
The case has its origins in 2003 when a quest was started by an online gambling company based in neighbouring Swaziland to obtain a declaratory judgement that its Internet gambling operations in South Africa were legal.
Casino Enterprises subsidiary Piggs Peak Online Casino initiated the court action on the basis that South African gambling on its internet sites is legal because the servers are in Swaziland, part of the common monetary area, and licensed and regulated by the Swaziland Gambling Board.
The application ran into trouble in November last year when Pretoria High Court Judge W. Hartzenberg said that, in his view Casino Enterprises had not disclosed a reason for approaching him for the order.
Casino Enterprises, which runs Piggs Peak online casino among other gambling venues, served application to appeal the Hartzenberg ruling on 7 December 2006, and Hartzenberg gave the company until 15 December to redraft its application for a court order that could declare its Internet gambling operations in SA legal.
In his 27 November judgment, Hartzenberg said that, in his view, Casino Enterprises did not disclose a reason for approaching him for the order. "In the result, I shall set aside the declaration and allow the plaintiff time to file an amended declaration" Hartzenberg said in the judgment.
The appeal assumed more importance than was at first sight obvious, because it refocused attention on ambiguities surrounding the legality of South African online gambling, which the national government at Cabinet level is currently considering legalising and regulating.
A further wrangle then developed when the Gauteng provincial gambling board cautioned that it had instructed its attorney to oppose Piggs Peak's "...application for leave to appeal and to lodge an application to order Piggs Peak to comply with the judgement handed down by Justice Hartzenberg, while waiting for the appeal be heard".
"This means the legal ambiguity about online gambling continues and that online gamblers and online gambling advertisers have a further reprieve from prosecution" said a Gauteng official.
Despite Hartzenberg effectively having set the case aside, the parties involved have up to now drawn diametrically opposite conclusions from the case. The National and Gauteng Gambling Boards view Hartzenberg's judgment as a victory and have threatened to prosecute online casinos, gamblers and advertisers alike, while Casino Enterprises believes its activities remain perfectly legal.
This week's permission to proceed with the appeal in the Supreme Court of Appeals was granted on February 8th, and the matter will now be heard in the Supreme Court of Appeals in Bloemfontein at a date to be allocated.
Meanwhile, the South African Cabinet has approved a Draft Gambling Amendment Bill to regulate online and cellphone gambling. National Gambling Board CEO Thibedi Majake last year said his board would license online casinos once the Bill becomes law.
Although the Casino Enterprises case could well be overtaken by political events, it remains one of significant international interest following the recent ruling by an Israeli judge that (in his opinion) Internet gambling takes place at the gambler's PC and not at the servers of the online casino.