SACOB COMMENTS ON THE
NATIONAL GAMBLING BILL [B48-2003]
EXECUTIVE SUMMARY
SACOB also proposes that this section include a definition of an "independent site operator", as well as "incidental use site" and "primary use site".
SACOB COMMENTS ON THE NATIONAL
GAMBLING BILL [B48-2003]
INTRODUCTORY REMARKS
The South African Chamber of Business, SACOB, wishes to place on record its appreciation to the Portfolio Committee on Trade and Industry and the Select Committee on Economic and Foreign Affairs for the opportunity given to comment on the National Gambling Bill, 2003.
At the outset, SACOB respectfully points out that there appears to have been only limited consultation with stakeholders. The Memorandum on the Objects of the National Gambling Bill, 2003 refers. The section dealing with the consultation process mentions that draft 10 was distributed for public comment. Regrettably, SACOB was not aware of the existence of the document, and consequently did not make a submission. The memorandum also does not list those organisations and individuals that were consulted, as is usually the case. SACOB is thus concerned that there may be some deficiencies in the consultation process.
SACOB is a business organization that represents, through its affiliated Business Chamber structures, Trade Associations and individual corporate enterprises, some 35 000 businesses throughout South Africa. SACOB’s interest in this proposed legislation stems from its activities related to tourism, and from the fact that casinos number among its members.
SACOB submits its comments in order to ensure that the gambling industry is appropriately regulated, thus making it possible for economic benefits of gambling activities to be realised without unduly prejudicing either the licensees or the gambling public.
GENERAL COMMENTS
SACOB welcomes the fact that the Bill aims to establish commonality regarding prohibited conduct relating to gambling in its several facets. We also note, and welcome, the fact that the Bill introduces requirements to reduce devastating and negative social consequences of harmful and addictive gambling, while at the same time seeking to facilitate a competitive market place and promote black economic empowerment.
The introduction of an improved system for the registration of gambling machines is supported in principle, as is the provision of a national system to electronically monitor limited payout gambling machines. The removal of the need to apply for multiple licenses in more than one province will streamline the application procedures.
An inter-relationship between provincial regulatory agencies and the National Gambling Board should bring about improved communication between not only the agencies and the Board, but also between the agencies themselves. Amongst other things, this should lead to all round improvements in the application of the proposed uniform licensing standards and norms applicable to provincial licenses.
SPECIFIC COMMENTS
"employment license" SACOB questions why it is necessary for an employee to be licensed in order to work in the South African Gaming Industry. SACOB can understand a need for certain categories of employees to be in possession of appropriate qualifications, and perhaps for the registration of persons in such categories, much as is the case with Tour Guides. SACOB suggests that this should be limited to those employees involved in the actual facilitation of gambling, and not, as it appears from the definition to all. SACOB asks what purpose would be served, for example, by registering a cleaner or a bar attendant, who could be regarded as employees?
"gambling machine" SACOB is unsure whether this definition would include computers as such machines are used for gambling – a well-known Swaziland casino, for example, offers on-line gambling. While SACOB understand that computers could be construed as gambling machines, it would be impractical to apply the Act to them and to include them on the proposed register, as many are never used for that purpose. SACOB notes, however, that in the schedule covering transitional provisions, it is intended to develop policy and law on interactive gambling. SACOB assumes that this will address the vexed issue of controlling on-line gambling, and the use of computers for that purpose.
"route operator" The meaning of a "route operator" is not clear, and it is not clarified in Section 18, or in Section 26, referred to section 18.
Gambling in relation to illegal activities unlawful
Section 7 (d) SACOB understands that this provision would apply to the occupant of leased or rented premises and not to the owner of premises on which the activity takes place. Thus SACOB believes that the property owner should not be held responsible for any unlawful activity indulged in by his or her lessee or other lawful occupant of his premises.
Unlicensed dealing in machines and devices unlawful
Section 9 SACOB queries if this section means that a special license must be obtained for the import of a gambling machine or device irrespective of its final destination? Would such a license and/or permit be necessary, for example, if the machine was destined for one of the neighbouring states, specifically, one of the neighbouring SACU member states?
Unlicensed use of premises unlawful
Section 10 (1)(c) SACOB believes that the intent of this section is to place the onus on the lessee of rented premises or on the owner if the owner is the operator, and not on the lessor. However, it is possible to misinterpret the meaning, as it can be construed to mean that the lessor must ensure that the lessee does not commit an act that is unlawful.
Unauthorised interactive gaming unlawful
Section 11 SACOB believes that this provision will be very difficult to police. One only has to consider the high rate of pornographic material and spam that is distributed via the internet and the difficulty in combating it to be aware that the monitoring of material accessed over the internet is an extremely difficult task, and as yet no appropriate solutions have been found.
Restrictions on granting credit or discounts to gamblers
Section 13 As far as we are aware, the activities prohibited in this section are currently common practice. SACOB notes that it is intended to make the continuation of such practices unlawful. We question whether this provision is based on an assessment of detrimental impacts on gamblers, or whether any other considerations apply?
Excluded persons
Section 14 (8) and (9) While SACOB recognizes the motives behind this provision, in order to ensure that no excluded persons are admitted to the premises, each person entering would have to be identified, and his or her personal particulars checked against the register. This would probably require the employment of additional staff and would add to the cost of doing the business. Furthermore, Section 14 (7) places a fee on access to the register of excluded persons, and in order to ensure that access to the premises is controlled in accordance with the provisions of the Act, clarity will have to be obtained on what constitutes access to the register, i.e. would it be a fee for blanket access or would each reference to it be construed to be separate and a fee levied therefore. SACOB fears that this provision will be difficult to implement, and while it does not have an answer, would like to see a provision that will achieve the same objective without the accompanying burden on the operator.
Enforceability of gambling debts and forfeiture of unlawful earnings
Section 16 (1) (a) While we accept that a gambling debt of a minor should not be enforceable, we are concerned that this should be extended to include an excluded person. Exclusion can be a voluntary action, and an excluded individual knows that he or she should not gamble. This being the case, and in addition, it being difficult to monitor access to gambling premises by excluded persons, it could encourage excluded persons to gamble (and in addition take the risk of being recognized as an excluded individual). SACOB suggests that the debts incurred by an excluded person should be enforceable.
Standards for gambling premises
Section 17 (2) The Memorandum on the Objects of the National Gambling Bill, 2003 states that one of the objectives is "prohibiting the placement of ATM’s in licensed premises. SACOB believes that this provision needs to be carefully assessed ion spite of the motivation for its inclusion in the Bill.
Currently ATM machines are placed in very close proximity to gambling machines. Would these areas, outside the demarcated gambling areas, be deemed to be on the licensed site? If so, this provision would require them to be removed. Bearing in mind that one of the principles on which existing casinos were licensed was that there should be a substantial tourism component to the facility, the removal of ATM machines could have a negative impact on the tourism businesses that are part of the facility. To a large extent, members of the public use ATM’s to draw cash to pay for entertainment and for purchases in spite of the common use of credit cards.
SACOB believes that provision must be made for visitors to the facility who are not gamblers, and these numbers can be considerable, to access ATM’s.
Sites
Section 18 (2) This section refers to the licensing of a site for an incidental use category in terms of section 26 (1) (b). Section 26 (1) (b) does not explain what is meant by incidental use. It is thus assumed that the Minister is given substantial powers to classify a use as incidental. SACOB believes that there should be guidelines for such a classification.
Section 18 (3) A route operator is defined as a person who is licensed as such in terms of applicable provincial laws contemplated in Section 18, but that section does not clarify what a route operator is. SACOB believes that the definition of a route operator should be reviewed with the objective of a clear description.
Likewise, Section 18 (7) refers to an independent site operator, while there is no definition or reference to what such an operator is
Transfer of registered ownership or possession
Section 23(4) This provision states that approval is not needed for the removal of a machine for maintenance purposes. However it does not provide for the temporary replacement of a machine that may have to be removed for maintenance or repair.
Limited payout machines
Section 26 (1) SACOB believes that the Minister should only set a limit on the number of licensed limited pay-out machines after consultation with the Council and the Board.
Section 26(1)(b) There are no definitions of either an incidental or primary use site. SACOB recommends that such definitions be incorporated into Chapter 1. Likewise, SACOB recommends that definitions of route operators and independent site operator be incorporated into that chapter.
Section 26 (3) This section deals only with route operators. It is not clear if it the intention that similar provisions should be applied to site and independent site operators or whether they would be exempt.
Section 26 (4) SACOB assumes that in the case where a provincial law provides for a smaller number of limited pay-out machines than prescribed by the Minister, that the provincial provision would take precedence. This being the case, SACOB believes that it should be stated in the legislation.
National Electronic Monitoring System
Section 27 (1) SACOB notes that the Board is tasked with setting up and maintaining a national central electronic monitoring system. SACOB queries how the establishment and maintenance of the system will be financed since the Bill is silent on this issue. Similarly SACOB queries if a charge will be levied on licensees for accessing the data on the system as provided for in Section 27 (5)(b).
Part E: Licensing of persons employed in gambling industry
Gambling industry employees to be licensed
Section 28 Notwithstanding the provision in Section 28(4) that the Minister may by regulation determine any specific category of work to be subject to licensing, SACOB is concerned at the statement in Section 28 (1) that states that a "person must not engage in any work within the gambling industry in terms of this Act or applicable provincial law unless that person has a valid national or provincial employment license permitting that work". SACOB trusts that when the regulations are drafted, the Minister will consult with the industry in order to determine what categories of employee would require licensing, and what training and qualifications would be needed.
Jurisdiction of provincial licensing authorities
Section 30 (1) (a) (ii) SACOB trusts that guidelines will be issued and that checks and balances will be put in place to ensure uniformity of standards if provinces are to be empowered to issue national licenses.
Oversight function of board
Section 34 (2) This sub section is difficult to understand as it is not clear to what "the exercise" refers. SACOB assumes that it refers to the functions of the board and of the Chief Executive Officer. SACOB believes that the reference to "exercise" appears to be tautologous, and if not, its meaning should be clarified.
National license procedures
Section 40 (2) (a) SACOB recommends that should a license application be refused, the applicant should be advised of the reasons for the refusal, and where applicable, be given an opportunity to rectify the fault so as enable the license to be issued, recognizing that the applicant may not be able to take corrective action in all cases.
Review of refusal to issue national license
Section 41 SACOB recommends that the applicant be given an opportunity to address the reasons for the refusal, and only on a subsequent refusal to issue a license should the jurisdiction of the high court be sought.
Review of proposal to issue national license
Section 42 SACOB notes that this section deals with procedures to be adopted in adjudicating license applications. SACOB also notes that no time frames are included in the provisions. SACOB believes that in order to avoid prolonged delays the legislation should stipulate the time within which each step of the process should be completed.
Amusement games and machines
Section 47 (3) (a) SACOB believes that there is a possibility that the description of an amusement game could be too restrictive. For instance, SACOB questions if this would preclude the gambling games normally found at fairs and amusement parks. If so, this could result in loss of income and jobs for those individuals who may have been legally engaged in the activities for considerable periods of time.
Disqualifications and restrictions for other licenses
Section 50(2)(h) and (i) These two sections seem to be inconsistent. Section 50(2)(h) refers to removal from office on account of fraud or misappropriation of funds with no effluxion of time or conviction. Section 50(2)(i) refers to a conviction of theft, fraud, forgery or uttering, perjury or offences under the Corruption Act or the Gambling Act within the previous ten years. SACOB believes that the two sub-sections should be brought into line.
Sections 50(3) and (4)(b) It appears that there is a typographical error in each of these two sections and that sub-section 1 in each should read subsection 2.
Economic and social development issues to be considered
Section 53(1)(a)(i) and (ii) SACOB queries if the use of the word "or" between Section 53(1)(a)(i) and (ii) is correct, or if the intention is for both commitments to both to be considered as indicated in the heading to this section.
Section 53(2)(b) Any additional or different conditions to be imposed on the license holder must be done after or in consultation with the license holder.
External probity reports
Section 57(1)(a) and (b) SACOB believes that any additional information required should be related to the license application. The current wording makes it possible for non-related information to be obtained.
Establishment of National Gambling Policy Council
Section (2) SACOB notes that no provision is made for stakeholder representation on the proposed Council. SACOB believes that provision should be made at least for business and labour to be represented, and possibly community representation as well.
Conflicting interests
Section 68(5) SACOB believes that should an individual who has an interest in an issue under debate fail to disclose this interest, and participates in, and influences the proceedings, should render decisions invalid.
Committees of board
Section 71(2) SACOB is of the view that there could be merit in co-opting specialists onto committees of the board, with the proviso that they do not have voting rights.
Staff of board and remuneration
Section 73(a)(i) Surely the Chief Executive Officer should be responsible for the entire operation of the board, not only the financial administrative responsibilities? It is possibly the intention to make him or her responsible for financial and administrative functions.
Enforcement and offences
Powers and duties of inspector
Section 77()c)(iii) SACOB questions whether it is intended that any person on the premises can be questioned – for example, would this apply to a patron at a restaurant on the premises – or to gamblers – or to employees. SACOB suggests that this be clarified.
Failure to comply with Act
Section 81(b We question whether the term "contempt of court" should be used in this section. It is normally a magistrate, judge or other judicial officer that determines whether a person is in contempt.
Penalties
Section 83(2) Taking into account the turnover of many gambling operations, a fine amounting to 10% of the annual turnover for breach of a license condition could be substantially more than the maximum fine of R10 000 000 that may be imposed for a conviction in terms of the Act. This in the light of the fact that an inspector, and not a court of law, could determine if there had been a breach of the license conditions. SACOB believes that the penalties should be brought into line with each other.
Proof of facts
Section 86(1) and (2) SACOB is concerned that the presumptions contained in these provisions could render an innocent person responsible for actions by, and/or for statements made by other individuals. We accordingly urge that the constitutionality of these provisions be re-examined.
Development of interactive gambling policy and law
Paragraph 6 In this regard SACOB assumes that it is the intention to have separate legislation on interactive gambling, or that existing legislation will be amended to provide for specific provisions relating to such interactive gambling.
SACOB regards competition as one of the cornerstones of a market economy. Provided that the provisions of this legislation are applied with transparency and equity, there will be competition in the gambling market. However, some of the proposed provisions appear to be prejudicial to the tourism related facilities attached to casinos. The growth and development of South Africa’s tourism industry should be a priority, and everything possible should be done to ensure that this industry can develop and contribute meaningfully to economic growth, investment and job creation.
SACOB places on record its willingness to contribute to the development of a viable and sustainable gambling industry insofar as business principles are concerned and insofar as gambling can contribute economic activity in the country.