The halcyon days of unregulated Internet gambling are almost over for South African punters and gaming companies, as the National Gaming Board (NGB) has published draft regulations for the industry.
So far, local Internet gamblers and the companies that supply the services have been able to operate in an unlicensed manner. There was no law governing the industry`s conduct, as compared to the strictures covering traditional means of gambling, such as casinos and horse racing.
The amorphous nature of the Internet makes the regulation of the industry extremely difficult. This allows local players to gamble with companies that are located outside the country, as are their servers. This also makes it impossible to protect the players and the money that could be taxed.
It is also impossible to determine how many South Africans gamble online. However, South Africans are attracted to all forms of gambling, and there are estimates that one in five people gamble regularly at one of the country`s licensed casinos.
Eighteen months ago, the Department of Trade and Industry (DTI), the government department under which the NGB falls, had Parliament amend the National Gambling Act to cater for regulating the online industry. The Act now makes provision for the issuance of 10 online licences and has a heavy focus on protecting the player.
Wayne Lurie, of law firm Lurie Inc, says this strong focus on player protection is good for South Africans, as it ensures they are not cheated, will get paid and are dealing with a 100% trusted provider.
"The DTI have now shown a serious intent to regulate the industry and in order to do this, they have to have the legal teeth necessary," he notes.
Lurie says these teeth include ensuring the SA Reserve Bank and the SA Revenue Service are made fully aware of a player`s activities. They can do this by pressuring the commercial banks and credit card associations to flag online gambling transactions by using the "7995" code on the statement.
He says they will also pressure major media outlets to limit, if not eliminate altogether, advertising for such gaming activities.
"These regulations are obsessive with protecting the players and so will make life difficult for the providers, but it is good for the player," Lurie says.
When presenting to Parliament a year-and-a-half ago, DTI officials made it clear that any South African using unregulated or offshore gaming services would not be able to find recourse in the regulations that offer them protection.
The draft regulations are expected to be finalised in August.
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