Introducing the National Gambling Bill, 2003

Overview of presentation
- Background to Bill
- Objectives and principles of new Bill
- Overview of the industry
- Scheme of the Bill
- Detailed overview of the Bill

Background
Why a new Bill?
- Amendments proposed to Gambling Bill in 2000 and agreed at MinMec in 2001
- Drafting reformulations recommended for greater clarity
- Several fundamental issues currently in regulation better supported by legislation
- It is desirable to consolidate the law

New provisions introduced
Bill reenacts existing provisions and Introduces new
ones
- Outlaws certain activities and all licensed gambling activities
- Introduces prohibitions. requirements and standards to address problem gambling
- Introduces a system of registration of gambling machine to deal with illegal gambling
- Clarifies single national electronic monitoring system
- Introduces a system of national licenses
- Establishes norms and standards for provinces
- Establishes the National Gambling Policy Council

Objective of changes
- To clarify concurrent national/provincial jurisdiction
- To give effect to co-operative governance
- To provide for economic unity
- To ensure tighter control over gambling, especially illegal gambling
- To recognize the potentially negative socio-economic impact of gambling and the public policy objectives and to put in place mechanisms to deal with this

Consultation
- Extensive consultation with provinces, as main issues related to clarification of jurisdiction - Bill reflects agreement with provinces and PLAS
- Bill published for comment but only 3 weeks (18 August) given for comment due to Parliamentary requirements - comments still accepted up to 29 August (effectively 5 weeks)
- Workshop held with industry and public interest groups
- Comments incorporated and Bill circulated to interested parties to prepare for public hearings due to short publication period

Overview of the Gambling Industry
Background
- Gambling was legalised in 1994 on the basis that it was not possible to outlaw gambling and that it be better controlled if it was regulated.'
- In this context. four public policy objectives were identified:
= BEE
= Employment creation
= Creation of new fixed investment and infrastructure
= Generation of revenue

Overview of the Gambling Industry
Size of the industry
- The gambling industry, including the National lottery, currently generates about R6.8billion in gross revenue every year;
- Total revenue for government from gambling (excl lotteries) is just under R500 million per annum;
- Most popular forms of gambling:
= Casinos (70% of GGR). Horseracing (17% of GGR), National Lottery (13% of GGR), Bingo (less than 1% C GGR). LPMs?

Overview of the Gambling Industry
Meeting the public policy objectives
- BEE: 43% equity holding by empowerment companies; however, difficulties arising from financial arrangements
– Employment: estimated 50,000 direct and indirect jobs
= Gauteng (13,500), Eastern Cape (7000), Freestate (2000), North West (1000)
- Revenue Generation: R492 million (March 2002) gross revenue KZN
= Gauteng (58%), Eastern Cape (12%), Western Cape (12%), KZN (10%), remaining provinces account for 8% of revenue
- Infrastructure: R11.7 billion in investment

Overview of the Gambling Industry
Problem gambling
- No of problem gamblers as a proportion of regular gamblers is about 50% higher than in developed countries
- Incidence of problem gambling 1% of population with easy access to gambling activity
= Canada (1.6%), Australia (2.3%), New Zealand (1.3%), UK (0.8%)
– Need for proper control, especially over illegal gambling, protection of minors and monitoring of social impact

Overview of the Gambling Industry
Legal framework and administration
- Concurrent jurisdiction has resulted in contestation and legal challenge
- Duplication of functions, hampering economic activities occurring on a national level

Scheme of the Bill

Questions and clarification

Detailed overview of National Gambling Bill, 2003

Chapter 1: Interpretation and Application
- Definitions
- Application: does not apply to Lotteries

Chapter 2: National Gambling Policy
Part A: Gambling Activities
- Defines
= gambling activity generally:
= bests and wagers;
= gambling games;
= pay-outs and opportunities to play further

Chapter 2: National Gambling Policy
Part B: Prohibited gambling. restricted activities and status of gambling debts
- Prohibits illegal gambling; all unlicensed gambling activities except for informal bets; unlicensed dealing in machines or gambling devices; use of unlicensed premises; unauthorised interactive gambling; gambling by minors; credit for gambling;
- Provides for voluntary exclusion and imposes requirements

Chapter 2: National Gambling Policy
Part B: Prohibited gambling, restricted activities and status or gambling debts
- Places restrictions on advertising
- Provides for enforceability of debts through legal gambling activity (unenforceability of debts by minors and excluded persons)

Chapter 2: National Gambling Policy
Part C: Gambling Premises
- Standards for gambling premises Introduces new provisions to address concerns related to the overstimulation of gambling (proximity to schools, having a cash machine on the premises, notices)

Chapter 2: National Gambling Policy
Part D: Registration and certification of machines and devices
- Requires registration and identification of gambling machines or devices
- Provides for national register of machines and devices and their registration
- Provides for transfer of ownership or possession
- Requires testing agents to be licensed
- Calibration and certification of machines and devices
- Regulations for LPMs
- Requirement for LPMs to be lin~ed to CEMS

Chapter 2: National Gambling Policy
Part E: Licensing of persons employed in gambling industry
- Requires all employees to be registered

Chapter 3: Jurisdiction and Licensing
Part A: Jurisdiction
- Outlines jurisdiction and responsibilities of PLAs andNGB
- Clarifies oversight function of NGB
- Requires PLAS to keep and share information
- Provides for conflicts in concurrent jurisdiction
- Provides for Ministerial powers to make regulations iro norms and standards

Chapter 3: Jurisdiction and Licensing
Part B: National Licenses
- Authority of national licenses
- Applications for a national license
- Authority to issue a national license
- National license procedures
- Review of refusal to issue national license
- Review of proposal to issue national license
- Suspension and revocation of national license

Chapter 3: Jurisdiction and Licensing
Part C: Provincial Licenses
- National norms and standards
- Maximum number of casinos licenses (by regulation, with transitional measures)
- Limitation of rights of a license
- Amusement games and machines

Chapter 3: Jurisdiction and Licensing
Part D: Licensing Norms and Standards
- License criteria, categories and conditions
- Disqualification for employment licenses
- Disqualification and restrictions for other licenses
- Disqualification after license issued
- Acquisition of Interest by disqualified person

Chapter 3: Jurisdiction and Licensing
Part E: Additional Norms and Standards
- Economic and social development issues to be considered and conditions to be attached
= BEE, overstimulation of gambling to be considered in license renewal annually; consistency with Liquor Bill
- Competition issues to be considered
- State interests
- License requirements, acquisitions and transfers

Chapter 3: Jurisdiction and Licensing
Part F: License Investigations, decisions. transfer and surrender
- External probity reports
- Decisions
- License transfers
- Surrender of license

Chapter 4. National Structures
Part A: National Gambling Policy Council Establishment, functions and meetings
– Establishment, functions and meetings

Part B: National Gambling Board
- Continuation objects and functions, provincial relations, composition of Board, conflicting interests, recognition and removal from office, meetings of the Board, Committees, Remuneration of Board and staff, finances and accountability

Chapter 5: Enforcement and Offences
- National Inspectorate
- Functions and powers of inspectors
- Breach of confidence
- Hindering administration of Act
- Self-incrimination
- Failure to comply
- Offences and breaches of license condition
- Penalties
- Serving documents
- Proof of facts

Chapter 6: Genera Provisions
- Regulations
- Repeal of laws and transitional arrangements

Schedule 1: Transitional Provisions
- Definitions
- General preservation of rights
- State interests
- National Gambling Board
- National Licenses
- Development of interactive gambling policy and legislation
- Excluded persons

Questions and clarification