South African Online Gambling Hearings Go On

Published: Tuesday, August 28, 2007 Online-Casinos.com

SOUTH AFRICAN ONLINE GAMBLING REGULATION HEARINGS CONTINUE

Tax will constrain gambling growth, says government official

This week has seen a continuation of the South African government's Department of Trade and Industry hearings on the proposed regulation of online gambling (see previous Online-Casinos.com/InfoPowa reports)

According to the Business Day newspaper, the acting deputy director general for the DTI, Fungai Sinbanda told the trade and industry portfolio committee Monday that a tough taxation regime would constrain the growth of gambling feared by objectors to the proposed National Gambling Amendment Bill.

Sibanda told the committee that this was the policy framework within which discussions were taking place between the trade and industry department and the treasury on the taxation of internet gambling.

The absence of tax measures for internet gambling in the National Gambling Amendment Bill was a concern raised by the Casino Association of SA (CASA) during a public hearing this week. CASA chairman Jabu Mabuza said the tax regime would be fundamental in determining the success of internet gambling and its consequences for bricks and mortar casino operations, and he stressed that a level playing field should be the goal so as not to prejudice the existing (land) industry.

Sibanda said the bill could not include tax measures as this was the remit of the Treasury, which would have to introduce a separate money bill. "The level and rate of tax will be determined by the policy approach which will be motivated by a desire to cap and limit the expansion of gambling. Taxation is a powerful instrument to control gambling activities" he said.

Sibanda said studies on internet gambling provided no convincing proof that existing casinos had been affected negatively by interactive gambling. [Land] casinos in SA were profitable and required no protection.

Sibanda rejected suggestions to give [land] casino operators the automatic right to operate interactive gambling, saying the two activities required different licenses. Automatic licensing was in principle a bad idea. "We believe license applicants must prove that they are fit and proper and have the expertise to conduct this form of gambling."

He rejected criticisms that the bill was poorly researched and hastily drafted. It had been under consideration and widely consulted on since 2005, when a committee was established to formulate a policy approach on regulating internet gambling, he said.

Further investigation was needed on whether to allow person-to-person gambling or tighten restrictions on access of minors to internet gambling. The bill prohibits anyone other than bookmakers from providing player-to-player gambling.

A representative of the UK-based internet exchange betting company Betfair argued for inclusion of player-to-player gambling. It objected to the requirement that licensed providers locate all their interactive gambling equipment in SA.