At the beginning of 2004 it was widely expected that the new National Gambling Bill in South Africa would outlaw online gambling but by September that year the government had taken the first steps towards legalising the industry. The National Gambling Act 1996 did not mention online gambling at all but the National Gambling Amendment Bill to the new 2004 Act deals with the regulation of interactive gambling. In October last year the Casino Association of South Africa (CASA) appealed for more research into the implications and commercial viability of legalising online gambling and for further consultation.

Currently Internet gambling remains prohibited in South Africa and under the National Gambling Act 2004 offenders face fines of up to 10 million rand (US$1.26 million) and/or imprisonment not exceeding 10 years. The Amendment Bill provides for approval of interactive games, equipment and software, registration of players, dispute resolution and fair treatment of players. Other provisions protect minors and vulnerable people from harm and exploitation. The bill further deals with advertising, licensing, compliance and enforcement, problem gambling, and money laundering.

One company eager to expand into the South African online betting market is Gibraltar-based Victor Chandler. The market potential is huge and in due course Victor Chandler hopes to expand from online betting into telephone betting as well. Feasibility studies will be conducted in October in Johannesburg, Durban and Cape Town. The National Gambling Amendment Bill has been passed by the National Assembly and awaits approval from the National Council of Provinces.

Victor Chandler will not be alone in pursuing business opportunities in South Africa when the Bill becomes law. In April it was rumoured that the Austrian company Bwin Interactive Entertainment was already making plans to enter the market. Then there are the land-based casino operators who want online operators to face similar taxation to that imposed on the casino industry in South Africa. The National Assembly denied their request that those companies that operate land-based casinos should be granted online licences automatically.

Online operators will have to obtain a national licence and locate servers and records within South Africa. They must verify the identity of customers and ensure that they are over 18 years old. They must also facilitate a customer nominated bank account to handle transactions. Those providing software systems for the operation of online gambling will have to obtain a national licence for key staff, the interactive software, related equipment and its suppliers and maintenance providers.

The Department of Trade and Industry, which sponsored the Amendment Bill, hopes that these measures will keep online gamblers playing at South African websites where probity and technical checks should guarantee their protection and limit problem gambling. (E-05.13.08)

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