Is Online Gambling Illegal In South Africa
- The National Gambling Board (NGB) in South Africa issued on Monday a media statement regarding the legality of online gambling in the country expressing its concern the topic appeared for public discussion in some circles. The regulator made it clear all forms of online gaming besides sports betting is strictly prohibited.
- According to the Gambling Control Board of South Africa, online gambling is illegal. Also according to the GCB, online betting is legal. So, what’s the difference? In SA, the term “online gambling” refers to the casino and poker games that are played from offshore providers.
- Is Online Gambling Legal In South Africa
- Is Online Gambling Illegal In South Africa Now
- Is Online Gambling Illegal In South Africa Right Now
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As you’d expect from a country which has a long and complex history in many ways, South Africa’s attitude to gambling has been no less tortuous.
The South African Bureau of Standards must then analyse the results and if found compliant they issue a letter of certification. Online gambling is still illegal within South Africa except for online betting via a licensed South African bookmaker. Both the operation and advertisement of online casinos within South Africa are illegal acts.
The very first definite legislation came into force as long ago as 1673 when all forms of gambling were banned, with severe punishments for those found to be breaking the law. It wasn’t until 1965, nearly 300 years later, that the laws were relaxed – and, even then, only slightly – as horseracing and betting on the races themselves was finally allowed. This was because it was classified as a sporting activity, not a gambling one.
During the 1970s casinos began to spring up around the country and by the mid-90s it was estimated that there were well over 2,000 establishments operating illegally all across South Africa. But with the end of apartheid there was a sudden sea change in the law.
The National Gambling Act of 1996 established a licensing system for the casinos which, it was hoped, would boost tourism and raise much needed tax revenue for a country throwing off the shackles of the old regime. The Act also permitted the establishment of South Africa’s first lottery and reclassified horseracing as a gambling activity, not a sporting one.
The rise of online gambling
Is Online Gambling Legal In South Africa
While the Act did a great deal to transform gambling in the country it was only eight years later in 2004 when another piece of legislation was deemed necessary to account for the appearance of online gambling. The 2004 National Gambling Act prohibited South African operators from both offering and indulging in interactive gambling online to play casino, poker and bingo games, although sports betting was still permitted.
In 2008, moves were made to modify the law to allow the licensing of approved online casino games with the National Gambling Amendment Act. However, opposition was so strong from a number of interested parties including the owners of land-based casinos and anti-money laundering authorities that the Act never came to pass.
There was even worse news in 2010 for anyone hoping to play in online casinos when a law was passed banning all internet gambling, even where providers were located outside of the country. The penalties for breaking the law were also set at such a high level that operators, players and even those processing payments for gambling would be deterred by the fines of up to R10 million or jail sentences of up to 10 years.
A growing problem
Is Online Gambling Illegal In South Africa Now
But, as is often the case when activities are banned by law, this has had the opposite to the desired effect by fuelling an illegal gambling industry that seems to grow larger by the year. It’s hard to get precise figures, but it is believed that the epidemic proportions of illicit gambling, both online and in the real world, mean that there are many, many more than the estimated 2,000 illegal casinos and gambling dens that were believed to be operating back in the 1970s. To say this is a problem for the authorities is something of an understatement.
It’s also a financial headache for the country. According to figure put together by the governing body of land-based operators, the Casinos Association of South Africa, in 2018 the gross gambling revenue for the country dropped by 2%, something the CASA believes can be firmly laid at the door of the illegal operators. In total this amounts to around R 37, million, 36% of which would normally be heading for the government’s coffers in the form of taxes and fees.
The CEO of CASA, Themba Ngobese, has been nothing if not forthright on the subject saying that it’s a problem that “not only affects the bottom line of licensed casinos‚ but society at large‚ as tax revenues‚ employment opportunities and associated economic activities are suppressed”.
A further dimension to the issue comes from the fact that there have been links made between illegal gambling and organised crime in the country, although, when questioned, the police have said that they prioritise other more serious crimes such as armed robbery over and above breaking up illegal gambling dens.
There’s very strong evidence to suggest that many of these continue to operate in plain sight in shopping malls up and down the country. Often these appear, on the outside at least, to be perfectly respectable internet cafes and lounges. But behind their darkened windows there are banks of computers connected to online gambling networks. Many also have security guards patrolling outside to deter any unwelcome visitors.
Learning from the UK?
Reformers who believe that the best way to tackle the issue of illegal gambling think that taking a leaf out of the UK’s book may be the answer. In 2006 the then Labour government brought in a whole raft of new laws to permit gambling and set up a regulator called The Gambling Commission. This coincided with the earliest days of online gambling and this has grown to become the biggest single sector in the UK.
Gambling online has never been more popular with residents of the UK. At the best online casinos, there is something for every type of player, for example, if you check out the quantity and quality of the games at the famous 888 casino, which is being widely regarded as the best provider of online casino games, you will understand why online gambling is currently so popular. With these games being such a hit in the UK, should the South African government be considering implementing similar laws? The games would likely be very popular, limiting the amount of illegal gambling which takes place within the country. By keeping a firm grip as well as working with the industry, not against it, The Gambling Commission has ensured that the industry is well-regulated and smooth running in the UK.
However, it would seem that South Africa is far from ready to head down this route with laws set to become even more strict that they are currently. In an amendment tabled in July 2018 by the Department of Trade and Industry it recommends a number of measures including banning dog racing, reducing potential payouts from land-based casinos and a crackdown on “hidden” entrances to gambling halls in shopping centres and arcades. To date the bill is still going through the legislative review process but it’s unlikely that any changes made to it will be major ones.
For those in favour of tighter regulations and greater restrictions on gambling it will be welcomed. For those who were hoping that a favourite pastime would soon be made easier it be a disappointment. But whether it has any effect on illegal gambling in the country remains to be seen.
South Africa holds a unique position within international gambling law, becoming among the very first to address the issue in codified form: The colonial system put in place by its Dutch overseers was responsible for the drafting of laws regulating gambling in 1673. Since that time nearly 350 years ago, the control of illegal gaming in South Africa has proven to be a true struggle. As was their wont in all corners of the globe, South Africa’s colonial ruling elite began horse breeding in the mid-17th century; thoroughbred horse-breeding would begin only in the late 18th century. Events of competitive horse racing began afterward, with the country’s first officially recognized race at Cape Town’s Green Point Common in 1797.
For this inaugural race, gambling was still disallowed under the law of 1673, but it is widely assumed that a fair amount of illegal betting on the race’s outcome was going down.And like in many other colonized lands, gambling at horse tracks in South Africa was the first such gaming to be legalized. In the case of South African law, betting on horse racing was limited as to the amount of money that could be legally wagered on a given event. This legal move in the 19th century was no doubt tied in with the burgeoning local horse-breeding industry.
What is the history of gambling laws in South Africa?
The gold and diamond rushes of the mid- to late-1880s in the Witwatersrand region is often cited as an example of illegal gambling gone wild, with shysters more than willing to help would-be prospectors part with their money in often crooked games – a familiar happenstance to anyone the least bit knowledgeable of the California and Alaska gold rushes.
Despite the strict Gambling Act of 1965, the 70s saw a mini boom of casino-style gambling in South Africa, as certain loopholes were exploited in various areas to allow hotels the right to host traditional-style casinos; the semi-autonomous regions of Bophuthatswana, Ciskei, Transkei and Venda were particularly notable in this regard.
Is Online Gambling Illegal In South Africa Right Now
With this model set, however, fly-by-night operations – again running on the “fool and his money” principle – opened and closed throughout the decade and throughout the 1980s as well. At the peak of such gambling in South Africa, estimates placed the number of illegal outlets at 2,000 running at any one time, with regions such as Bophuthatswana, Ciskei and Venda essentially allowing these operations to offer gaming within the “gray economy.”
What happened when change came to South Africa?
When tremendous political change came to South Africa in the 1990s and ages-old Apartheid laws were stricken from the books, gambling law was among those readily addressed by a reformed, more democratic government. The 1990s saw laws passed allowing for state licensure of gambling operations, ultimately paving the way for the National Gambling Act of 1996. At this time, the National Gaming Board was created and was soon followed by the issuance of some 40 gambling licenses, allowing said licenses’ owners to establish gaming houses in various locations throughout South Africa.
Is online gambling legal in South Africa?
The reformation of gambling law in South Africa which modernized the “bricks-and-mortar” setting of the industry continued in somewhat confusing fashion for the online milieu into the 2000s and beyond.
Another version of the National Gambling Act was put into place in 2004, and this was chased by the National Gambling Amendment in ’08. Both laws sought to regulate gaming at online casinos in South Africa, yet as of this writing the answer to the question “Is online gambling legal in South Africa” remains “yes and no.” The national statutes of the 2000s, approximating those of Australia and Canada, leave the question to the states. Today, technically legal online casino operations overseen by local government bodies operate in every South African state, but an estimated 2,000 such websites may be easily accessed by any resident in the country with basically no fear of recrimination.
By 2011, calls from parliamentarians for greater loosening of restrictions on online gambling (and thus greater tax revenue) have been strident and frequent, but five years later the South African national government prefers to stick with the rather regressive law put into place in 2012. This law passes taxation on to the player, i.e. all winnings from games of chance including in the national lottery above SAR 25,000 (approximately $4,000) are taxed as income at a rate of 15%.
Of course, this law seems rather ineffectual as regards online gambling. In similar fashion to most other countries which attempt to regulate their citizens’ online gambling, wagering money at offshore-based internet casinos is considered illegal and is actively dissuaded. However, as of this writing, not a single player wagering at so-called illegal offshore online casino operations has been arrested in South Africa. Therefore, not only has South African law been shown to be toothless on the ground level, the national government also misses out on that 15% tax revenue; in this respect, South African gambling law differs very little for that of most European nations.
We can see the realities of standing South African gambling law in light of the Piggs Peak Casino case of the early 2010s…
Whatever happened to Piggs Peak online casino?
In 2011, the Microgaming-powered/South Africa-based Piggs Peak Casino lost a court case and its subsequent appeal in which the casino’s legal team argued that, since Piggs Peak’s base of operations was located in the semi-autonomous region of Swaziland, its marketing to and acceptance of South African players should be allowed.
The results from the decision were multi-faceted. Immediately, the above-mentioned laws passed in 2011 and ’12 made certain to address certain local legal issues presented by the Piggs Peak operation. Secondly, the government started various awareness campaigns online to warn citizens against playing at foreign-based internet casinos.
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And finally, thanks to Microgaming’s status as a publicly traded company and their hands-on attitude regarding online casinos licensed with its software, Piggs Peak immediately ceased appealing to South African customers; naturally, the loss of its primary customer base caused the outlet to cease operations four months after the court decision.