E-gambling regulation a step closer

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 08 Feb 2007

Interested parties have another four days to respond to a Department of Trade and Industry invitation for public comment on its draft National Gambling Amendment Bill.

The proposed Bill, approved by Cabinet in December for tabling in Parliament, will effectively legalise Internet gambling by providing for the regulation of interactive gambling and the licensing of interactive gambling activities.

Submissions are due on or before Monday, 12 February.

National Gambling Board CEO Thibedi Majake says government concerns regarding online and cellphone gambling include the prevention of money laundering, protecting "problem" gamblers from themselves and keeping children away from an adult activity.

Majake considers the US approach - to ban online gambling - foolish and likely to drive the activity underground, where none of the listed concerns can be meaningfully addressed. Hence the South African decision to regulate.

The move will have the added benefit of fattening government's tax coffers and providing some transparency into an opaque world. No one knows the size of the local market either in numbers or revenue. Amending the current gambling law will make it easier to generate statistics.

Future danger

Peter Collins, executive director of the National Responsible Gambling Programme, says only about 1% of South African gamblers play online because far fewer people have access to the technology here than in Europe, Asia or the Americas.

Collins, also director of the Centre for the Study of Gambling at the University of Salford, in Manchester, in the UK, adds that worldwide about 3% of gamblers use the Internet, cellphones, or interactive television.

Collins does not expect the market to grow much after legalisation. "We do not expect this to increase simply as a result of legislation which will serve to regulate an activity which is presently available to anyone from sites located all round the world.

"Indeed we support the legislation precisely because it will encourage South Africans to gamble at well-regulated sites which will be required to include various safeguards against excessive gambling. We are, however, concerned that e-gambling may pose much more of a danger in a few years when the technology becomes more widely available and more user-friendly."

Open to abuse

Online casino Piggs Peak was more upbeat: "We anticipate that regulating the industry will grow the size of the market, but we are not sure how it will impact in terms of legislation," says spokesperson Wendy Graaf.

Collins says regulators must insist on including measures to prevent abuse. These should include encouraging players to set limits to their losses before they start gambling; linking the gambling site to another where the gambler can answer a series of questions to determine whether they might have a gambling addiction and providing telephone and Internet help-lines and counselling services; and supplying online information about how gambling works, its dangers and how to avoid them.

Majake is not too concerned about this issue. He says most sites require gamblers to register and provide financial details, so unlike "real" casinos there is a paper-, or at least electronic, trail. This makes it difficult for minors and others who should not gamble to do so.