Reading Debate of the National Gambling Amendment Bill, National Assembly
17 September 2007
Madam Speaker
Deputy Speaker
Cabinet Ministers
Deputy Ministers
Chairperson and Members of the Portfolio Committee on Trade and Industry
Honourable Members of Parliament
I am honoured to table the second reading of the National Gambling Amendment
Bill. This amendment provides legislation for the regulation of interactive
gambling. It seeks to, amongst others, protect society from the negative
effects of gambling; protect minors and other vulnerable persons from exposure
to gambling and to prevent gambling from being a source of crime and a channel
for money laundering.
Having recognised certain shortcomings in our law, this Bill addresses the
socio-economic implications of an unregulated interactive gambling industry by
establishing an effective and efficient regulatory framework in line with
government's broad policy framework for the regulation of all forms of
gambling.
The draft Bill was approved by Cabinet in December 2006 and published for
comment on 18 December 2006. Written comments were received from stakeholders
and public consultations took place over an extended period of time.
In summary, the Amendment Bill deals with player protection, problem
gambling, advertising, money laundering, enforcement and compliance, licensing
and other matters such as taxation, provision of games, and so on.
Madam Speaker, allow me to elaborate on each of these aspects
Firstly, in respect of player protection, the Bill provides for everyone
engaged in interactive gambling to be registered with a licensed interactive
gambling provider. Strict verification procedures that are compliant with the
Financial Intelligence Centre Act (Fica) will need to be complied with.
Statutory requirements such as attaining a sworn statement from the player that
they are 18 years or older, will ensure that minors do not have access to
interactive gambling.
In addition, players must nominate an account, held with an authorised
financial institution and this account will be the only account through which
transfers of monies will be carried out. The Bill will make any gambling
activity provided by an unlicensed provider unlawful and will prohibit South
African players from engaging in interactive gambling activities with
unlicensed providers.
Secondly, one of the key problems associated with interactive gambling is
its accessibility and availability around the clock. This Bill therefore
obliges the interactive provider, through licensing conditions and regulations,
to ensure that there is an electronic system for the monitoring and reporting
of registered players. Players will be required to set limits on accounts. The
principle of 'know your customer' will apply and providers will be required to
audit playing patterns and behaviour. Players will be exposed to self diagnosis
systems and notices on websites of service providers in respect of voluntary
player exclusion and treatment of addictive gambling.
Thirdly, the Bill makes the advertising of interactive gambling unlawful,
irrespective of whether such advertisers are based off-shore.
Fourthly, the Bill will be governed by Fica requirements as far as money
laundering is concerned. One of the main provisions on money laundering is that
gambling equipment, which includes the server and other key records of players'
transactions, be located in South Africa. Also, registration of players,
verification of player identity and only allowing players from selected
countries that comply with Financial Action Task Force (FATF) or designated
organisations to engage in interactive gambling licensed in the Republic, will
apply. Other control measures include the establishment of player accounts, the
verification of nominated accounts, regulating the method of payment to the
provider such as electronic methods of payment only and a requirement that a
provider must not convert any funds in a player account into any other form of
value. The interactive provider has an obligation to report suspicious and
illegal activities. The provision of control systems will therefore be
prescribed to ensure compliance.
Madam Speaker interactive gambling is borderless. Therefore the fifth area
we deal with is our view that the enforcement and administration of this Bill
should be discharged at a national level. In support of this principle, the
National Gambling Board will ensure compliance with the National Gambling Act
and conditions of licence. The Board will supervise and enforce compliance by
licensees with Fica requirements and conduct inspections in respect of
interactive gambling websites and premises where interactive gambling equipment
and software are located. The Board is empowered to revoke or suspend
interactive gambling licenses for non-compliance and as part of cooperative
governance may delegate some of its enforcement and compliance powers to the
Provincial Licensing Authorities.
In regard to the sixth key issue addressed by the Bill, licensing in
general, the Bill provides for the licensing of interactive gambling and that
these licences be issued as national licences due to the borderless nature of
this activity. The interactive gambling licences include operator licences,
employee licences for key employees, management staff and directors or
shareholders. There are also licensing or testing and certification
requirements for interactive gambling software, equipment, manufacturers,
suppliers, and maintenance providers of interactive gambling equipment.
Finally, honourable members, the Bill provides for the imposition of
taxation which will be catered for in a separate money Bill. The Department of
Trade and Industry (DTI) is currently in consultation with National Treasury on
the procedure for the imposition of such a tax. It is our view that taxation
will be optimised to create a level playing field and at the same time be used
to curb any proliferation of gambling.
Madam Speaker, as we all know, constant developments in technology have a
direct impact on conventional methods of product and service offerings. Thus to
allow for flexibility in the ever changing environment of information and
communication technology, many of the provisions in this regard will be
provided for in the regulations.
In conclusion, I would like to thank the Portfolio Committee on Trade and
Industry for their guidance, support and important contributions. The Committee
has done a sterling job by further strengthening the provisions of the Bill
especially in the areas of advertising, tightening provisions on player
registration, money laundering and establishment of foreign company presence in
South Africa, amongst others.
I also extend my gratitude to other government departments, key stakeholders
in the industry, our provincial counterparts, and members of the public for
their inputs into these amendments. Their commitment to ensuring that this
Amendment Bill is appropriate and consistent with government's broad policy
framework for the regulation of all forms of gambling has been extremely
helpful.
Madam Speaker, I commend this Bill to the House.
Issued by: Department of Trade and Industry
17 September 2007
Source: Department of Trade and Industry (http://www.dti.gov.za)
