Online gambling in South Africa: Is it legal? (update)

Not until our appeal has been heard, says Piggs Peak owners

The Gauteng Gambling Board's claim that online gambling is illegal in South Africa following a judgment in the North Gauteng High Court last week (see previous InfoPowa reports) continues to generate discussion and argument in the country.

The Business Day newspaper reported Friday that contrary to the claims by the Gaming Board, online gambling remains legal in SA until Piggs Peak Casino’s appeal against the judgment is heard. Piggs Peak operational manager Lew Koors has already said that the online casino's owners, Casino Enterprises, will appeal.

The newspaper goes on to discuss the impact of Casino Enterprises losing the appeal, pointing out that the restrictions on advertising and promotions would harm SA media companies.

"Under the threat of criminal prosecution for carrying advertising for online gambling companies, the media sector stands to lose Rands 76 million in earnings, which is what it made from online gaming ads between June last year and June this year," Business Day claims.

According to Nielsen’s latest media research, two of cash-strapped SABC’s TV channels and one radio station stand to lose nearly Rands 4 million alone, and the biggest loser will likely be the private satellite television provider MultiChoice.

The Casino Enterprises vs. Gauteng Gambling Board issue was triggered by media advertising; seven years back the Board warned three radio stations to stop advertising commercials for Piggs Peak, an action contested by Casino Enterprises in a dispute which involved where gambling actually takes place in the internet context.

The litigation went before the North Gauteng High Court, which ruled in favour of the board, triggering an appeal by Casino Enterprises to the Supreme Court of Appeals. But this judicial body referred the case back to the originating (North Gauteng) court. It is this court which has ruled against Casino Enterprises and given the Board the confidence to claim that all online gambling, and the promotion or advertising thereof, is illegal.

But, reports Business Day, the irony of the present judgment is that another act is sitting in the wings that effectively makes online gaming legal.

Wayne Lurie, an attorney specialising in gambling law, told the newspaper that the Interactive Gambling Act, promulgated in 2008, makes it possible for 10 online gaming operators to get licenses.

It has not yet been implemented as adjoining regulations need to be approved by Trade and Industry Minister Rob Davies, who convened a Gambling Review Commission last year whose report is due in September.

Lurie points out that section 11 of the National Gambling Board Act, on which the judgment relies, was meant to be only an interim measure until the new legislation came into effect.

“It was intended to serve as a stop-gap measure while enabling legislation was finalised for the licensing of interactive gambling, which is supposed to have been finalised by 2008," said Lurie.

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