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Minutes:
Gambling Commission Review Report: Departmental report back on the public hearings
Ms Zodwa Ntuli, Deputy Director-General (DDG): Corporate and Consumer Regulation, Department of Trade and Industry (the dti), said that civil society’s voice had not been expressed and the Department was seeking a means to get access to forums for society’s voice to be heard as that was where the social effects of gambling were felt.
She said the regulatory environment was subject to concurrent jurisdiction between national and provincial. The National Gambling Policy Committee comprised of the Minister of Trade and Industry and the nine Members of the Executive Councils (MECs) of the provinces. National provided the oversight role while the provinces issued the licences.
Concerns had been raised over the lack of uniformity in how the industry was regulated. The Department wanted to reduce the cost of compliance in the industry and properly align the provincial structures and national legislation to prevent “forum shopping”. Broad-Based Black Economic Empowerment (BBBEE) requirements had to be applicable to all in the industry and thus co-ordination was crucial. The pace of transformation was slow, not only in ownership, but across the value chain. There was a need for the industry to commit to the targets set. There was a possibility of monopolies emerging which would make it difficult for new entrants to the market. Issues around policy and legislation; rules and regulations; co-ordination and implementation all still required attention. The Policy Council was not an effective or efficient mechanism, with meetings regularly not having a quorum. The next meeting would be on 27 March 2012. She said Parliament should request a coordinating structure for provincial legislation on issues of concurrent jurisdiction. She said there had to be restrictions on advertising. It had to be managed and monitored. There had to be guidelines and approval for the content of adverts. There was no framework currently to control Bingo, yet provinces were issuing licences. Online gambling needed a particular, unique approach. She noted that concerns had been raised on how minors would be protected and on money laundering with regard to interactive gambling. The regulations needed to be improved to deal with these concerns. She said the current legislation was not flexible enough to accommodate technological innovations with regard to the broader online gambling. Online gambling would need further discussions and would require significantly more people with cyber skills. A cost/ benefit analysis would have to be done. Racing, in all its forms, would be looked at as animal racing and, consequently, measures to deal with the welfare issues of animals. There was a need to look at a funding model for the Responsible Gambling Programme. Responsible gambling activities was not enough and it had to be aligned to a proper strategy, which had not been crafted yet. The review of the Lotteries Act would look at efficiency in the distribution of funds and deal with conflict of interest matters.
Mr J Hill-Lewis (DA) wanted the Committee to write to MECs urging their attendance at the March meeting. He wanted the Department to furnish the Committee with a list of regular non-attendees.
Mr X Mabasa (ANC) wanted a list of the benefits of gambling.
Adv A Alberts (FF+) asked how online gambling would be regulated, as even the United States of America (USA) had difficulty.
Dr W James (DA) asked if gambling was a regressive tax, if shareholder returns in the industry were good, whether there was a trade-off for provinces on the re-issuing of licences and whether the public good was served by the National Lotteries Board. Given good governance, for how long would non quorate meetings be tolerated.
Mr Macdonald Netshitenzhe, Chief Director: Policy and Legislation, the dti, said that it was difficult but do-able to regulate interactive gambling, but not online gambling. There was a need to analyse what could be done through the Policy Council and what needed legislation. He said the Policy Council was not working. On the list of benefits of gambling, he said that the public good was served through the disbursements it made and by the negative effects it attempted to mitigate. He said it was proper to adopt the welfare of animals a policy and the Department would work with veterinary services.
Ms Baby Tyawa, CEO of the National Gambling Board, said a social impact study on gambling had been undertaken. The fact that people had to go to a designated place to gamble did regulate gambling. The study showed that 78% of the population did not gamble. 80% of the balance gambled on the lottery and four per cent on horse racing. Of those who gambled, there was a bias towards the metro areas. Gambling was the second largest income for provinces, after the fiscus, so it was very important for them.
Ms Ntuli, said the gambling legislation was not there to get revenue but to control the industry. The industry was worth R17 billion and accounted for significant job creation.
Mr Lionel October, Director General, the dti, said that there appeared to be a sub text in the arguments against transformation; that it was costing the country. It was incontrovertible that the benefit outweighed the cost. He said shareholder returns were very good in some sectors which had resulted in the increase in the gambling tax. The gambling industry, with a growth of 7%, had outperformed gross domestic product (GDP) growth (that was the growth in other industries), but it had also suffered the most in the recession and therefore there had been a decline in the lotteries income. Gambling had a disproportionate effect on the poor and therefore needed to be tightly regulated. The level of gambling the country was prepared to tolerate had to be determined. The lotteries distribution had to be reviewed as it needed full time professional staff and had to be separate from the Lotteries Board.
Ms Ntuli said the next study by the Department would focus on online gambling.
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