Comment submitted, by the South African Gaming Manufacturers Association (SAGMA), on the "Final Draft" of the National Gambling Bill dated 30th July 2003.
Firstly, as a general comment on the Bill as a whole, SAGMA is extremely concerned that on the one hand the Bill attempts to streamline the licensing, administration and registration requirements for manufacturers by introducing the concept of National Licenses but continually refers to "complementing" provincial licensing authorities. This creates the situation whereby the onerous provincial gambling legislation, regulations and rules that members are already required to comply with will be duplicated at a national level and thus additional layers of regulation will be added. In summary, the current inconsistencies across provinces makes doing business very difficult for us and SAGMA is disappointed that the introduction of this bill will not, in its current form, alleviate the problem by enacting one law and one set of regulations under which we conduct our business.
One way to achieve a major step forward for the industry and all regulators would be to make the "system of registration of gambling machines" a "National Registration System" (NRS) that the NGB, provincial licensing authorities and the industry are required by law to use exclusively. Each entity can have the relevant access privileges to the NRS and that this should be the only system used nationally. The following functionality should be included as a minimum:-
The implementation of a "National Registration System" with the above functionality is supported by SAGMA, and the association has already spent considerable time and effort researching the subject. A separate draft document providing greater detail on the potential design and functionality of a "National Registration System" is attached to this response.
SAGMA would like to specifically comment on the following sections of the Bill;
The definitions for "gambling device" and "gambling machine" need more careful consideration. The SABS technical committee that have worked on the SABS 1718 standards have defined them as follows in the latest standard to be worked on SABS 1718-2:-
"Gaming device"
any device manufactured with the intention of being used for gaming purposes, including the monitoring and control system, GMs, host, site data logger or any combination of these, including software
"Gambling machine"
gambling machine, slot machine, machine with which the player interacts for the purpose of gaming
SAGMA is not suggesting that this definition is preferable but pointing out that there is a great deal of inconsistency. There is differing definitions in national & provincial legislation and SABS 1718.
SAGMA would like confirmation that the definition of Gambling Device or Gambling Machine means the entire assembly, and is not intended to include sub-assemblies or individual parts.
SAGMA would like to add the words "where gambling takes place" so that the clause would read as follows:-
"Licensed premises" means specific premises, where gambling takes place, that are named or described in a licence issued in terms of this Act or applicable provincial legislation;
Otherwise the definition would also include Manufacturers premises and this would create problems in respect of other clauses that reference "licensed premises".
SAGMA is concerned that this clause is worded in such a way that it could be interpreted that trade publications in which manufacturers advertise within the industry would be included. These publications are not intended for distribution to the public and contain page after page of adverts by manufacturers aimed at operators. SAGMA does not see the need for such adverts to include a statement, in the prescribed manner and form, warning against the dangers of compulsive and addictive gambling.
Further, such items as promotional material (shirts, banners etc.) with game logo's or theme names would, in terms of the clause, also need to include a statement on them.
SAGMA suggests that the clause be modified to read as follows:-
"Any advertisement of gambling premises, a gambling activity or a gambling device directed at members of the general public must include a statement, in the prescribed manner and form, warning against the dangers of compulsive and addictive gambling."
We believe this section should be titled "Licensed Premises" and not "Gambling Premises" as gambling premises are not defined in the Bill and Part C references licensed premises.
SAGMA suggests that this clause be re-worded as follows:-
The reason for this is that whilst we agree that every gambling machine or gambling device imported into or manufactured in South Africa should be registered, not every, gambling machine or gambling device needs to be certified. Some machines or devices may be imported or manufactured for demonstration purposes and some may be for re-export.
As per our opening comment we would urge that the Bill should only mandate that manufacturers record Gambling Devices & Gambling Machines on the National Registration System and that there should be no other requirement for additional provincial reporting or record keeping.
The word "permanently" should be added to this clause after the words "A person must not". The reason for this is that Manufacturers occasionally need to remove the identification plate for the purpose of refurbishing, painting or applying Formica to the machine.
This clause appears to contradict Clause 19 on page 42. SAGMA strongly urges that this clause be completely removed. EVERY gambling device must be registered upon importation or manufacture irrespective of weather or not that type of machine or device has been certified.
If the clause is left as it is, this creates the possibility of unscrupulous entities importing or manufacturing equipment illegally and not registering such equipment because it is not certified. This defeats one of the main objectives of the National Registration System.
Further, manufacturers wishing to import or manufacture gambling devices either for certification, or for re-export, must have the ability to register the equipment for these purposes.
SAGMA would once again like to emphasise that the National Registration System should be utilised to automate the requirements for the transfer of registered ownership or possession.
SAGMA feels strongly that these clauses are of a technical nature and should be covered by the SABS 1718 Standard and not contained in this Bill.
SAGMA requests the addition of the words "and registered owner" after the first two words of the clause "the licensee".
The reason being that in the case of leased machines it would be imperative for the registered owner to have access to the prescribed data on the system that originated from that machine.
Over-stimulation of gambling and addictive and compulsive gambling
SAGMA has reviewed the proposal to address "the over-stimulation of gambling and addictive and compulsive gambling" through measures in the Bill.
However, we are concerned that the measures currently under consideration:
SAGMA is of the opinion that problem gambling is a complex behavioural issue which can only be effectively addressed through the proper treatment of problem gamblers as opposed to tinkering with gaming machines and gaming operations in the uncertain hope that these measures will have some impact on problem gamblers.
Of critical importance is that the emotive nature of the subject does not lead to ill-informed decisions being taken which do not achieve the desired result.
SAGMA through its various members and their international operations has had exposure to responsible gambling initiatives proposed in other gaming jurisdictions.
Of particular interest is the mature Australian market, which over the past number of years, has been confronted with an extensive statutory responsible gambling regime. The impact of the initiatives adopted to date have yet to be determined and it remains questionable whether or not they have been effective in curbing problem gambling.
In order to obtain an independent opinion on the effectiveness of some of the responsible gambling measures proposed the New South Wales Gaming Industry Operators Group funded independent research work by both the Sydney University and the Centre for International Economics and the results of such studies can be found on the following website www.agmma.com .This research questions the effectiveness of some of the proposed responsible gambling measures.
All of the initiatives proposed in the Draft National Bill, 2003 have a direct impact on the businesses of the casino operators and the members of SAGMA are likely to be affected indirectly by any legislation passed which does not address the issue of problem gambling and rather results in a significant downturn in casino revenues generated and a resultant reduction in capital expenditure by the operators.
Already the various gaming machine suppliers are faced with a declining gaming market as the operators' businesses transition from start-up to a consolidation phase. This is exacerbated by the fact that the replacement cycle has not commenced due to the recent establishment of most casinos.
Any further reduction in business volumes will see a curtailing of operations by the gaming machine suppliers with the obvious impact on profitability, taxation paid, levels of employment and volumes of spending in the local economy.
The South African gaming industry prides itself on its global standing as an environment where players have access to the latest in the entertainment focused gaming solutions produced by the industry's world leaders.
Reduced business volumes will increase the development and certification costs per game delivered to market materially and may bring into question the viability of bringing certain product lines to market. Should the business volume reduce significantly then the very viability of some manufacturers business investments in South Africa will be called into question. Should new products cease to be available either because the cost of bringing them to market is too high or because some manufacturers can no longer justify supporting a South African operation then this can only impact adversely on the recreational player's gaming experience and the long term attractiveness of gaming as an alternative form of entertainment.
System for Voluntary Exclusion and Court Ordered Exclusion
Such a system is supported in principle. However, we are concerned about the detail of the system and wish to raise a number of key issues for consideration by DTI.
The first of these is the question of the legal obligations of gaming operators to exclude vulnerable persons. It is virtually impossible to exclude people who disguise themselves to obtain entrance to gaming venues as is evident from experience in overseas jurisdictions, particularly Australia. The difficulty arises when legal obligations are introduced which mandate self-exclusion. Such obligations impact on the insurance premiums payable by venues which could become prohibitive unless care is taken to address this issue from an insurance perspective.
Cautionary Notices
Notices are prescribed in many gaming jurisdictions around the world but it is unclear precisely how effective they are in relation to problem gamblers. We believe that the inclusion of warnings in advertising under consideration could provide useful information to problem gamblers and 'at risk' players and should be supported provided that the warnings are not so radical and intrusive as to go beyond the informative purpose and destroy or otherwise negatively impact on the underlying entertainment activity.
It is accordingly recommended that warnings should be clear, short and target 'excessive gambling' in the manner currently prescribed in South Australia ("Have fun but play it safe") and those prescribed by current regulation in New South Wales, namely:
DON'T LET GAMBLING TAKE CONTROL OF YOUR LIFE
GAMBLING CAN BECOME ADDICTIVE
EXCESSIVE GAMBLING CAN RUIN LIVES
EXCESSIVE GAMBLING CAN DESTROY FAMILIES AND FRIENDSHIPS
EXCESSIVE GAMBLING CAN LEAD TO THE LOSS OF YOUR HOME AND OTHER ASSETS
EXCESSIVE GAMBLING CAN AFFECT YOUR HEALTH
It is in fact suggested that these cautionary notices be specifically included in the new requirements.
Difficulties have been identified in relation to cautionary notices.
In this respect, we refer to a Report to the President and Congress of the United States on Health Hazards Associated with Alcohol and Methods to Inform the General Public of these Hazards. The report identified a difficulty that, is suggested, is equally relevant in this context:
"Although both Departments believe the problems of alcoholism and other alcohol-related health hazards to be an extremely significant public health problem, it is not clear at this time that the risks associated with alcoholic beverages could be effectively communicated through labeling. A difficulty stems from the fact that it has not been established that moderate alcohol consumption is hazardous for most alcohol consumers."
We believe that it is equally true to state that it has simply not been established that moderate gaming activity is hazardous for recreational players. It is accordingly suggested that there is a case for taking care not to stigmatize gaming for recreational players. This would involve framing such warning messages to ensure that recreational players are not caused unnecessary uncertainty perhaps by providing them with a term of reference from which to judge whether their gaming is excessive.
It is accordingly suggested that all warning messages should refer to 'excessive gambling' or 'problem gambling' or 'addiction' to avoid stigmatizing recreational gaming or 'shaming' recreational players in the way that the Victorian responsible gambling television advertisements do in Australia.
For example, a warning such as 'Are you spending too much on gaming today?' is likely to stigmatize gaming for recreational players and this, it is submitted, is simply not justified.
Other studies suggest that well-intended Government health warnings may even 'boomerang' by actually increasing the desire, in the message recipient, to engage in the very behaviour that is sought to be discouraged:
"Common sense leads one to expect that the presence of a Government health warning should discourage people from buying a product. The presence of such a warning should reduce the desirability of a product as the warning provides negative information about the product and, when coupled with an advertisement, the Government health warning should reduce the effectiveness of the advertisement. There is evidence from psychological literature however that the relationship between added information and attitude change is not as simple as common sense suggests. Some research has focused on the size of the discrepancy between the favourability of a person's attitude towards an object and the favourability of the new information. Where there is either very little or a very great
difference between the favourability of the new material and the individual's own attitude, then very little attitude change takes place. Where the extent of the difference falls between these two extremes, then the amount of attitude change is much greater. However, if the new information is extremely discrepant, then a so-called 'boomerang' effect occurs and the attitude change occurs in the direction opposite to that of the new material."
It is suggested that the discrepancy between a problem gambler's belief system and the material in the proposed warning messages is likely to be 'highly discrepant'. Are warnings going to encourage the very behaviour that they are trying to discourage in the very group that is sought to influence? This would be very unfortunate as this study suggests that the messages are likely to be effective in discouraging recreational gamblers from playing gaming machines.
Minimum Closing Hours
There is no evidence, to our knowledge, those players of gaming machines during particular periods are more or less likely to be problem gamblers than players who play at other times during the day and evening. Given that such a measure to close venues during the early morning or evening simply inconveniences a group of particularly hard working recreational players one might reasonably inquire as to what is sought to be achieved by such a measure. In short, what is the purpose of discriminating against shift workers?
SAGMA appreciates the opportunity afforded by the DTI for consultation before measures which could have a significant impact on the South African gaming industry are implemented. SAGMA wishes to emphasise that it is committed to the minimisation of problem gambling in South Africa and supports any initiative which meets this objective.
SAGMA would welcome any opportunity to make further specific submissions on the draft National Gambling Bill, 2003 and are prepared to arrange for international representatives with experience in these matters to make personal submissions.
Finally SAGMA understands that there will be an opportunity for public debate on the above from the 18th September. Whilst SAGMA will try to be represented at this occasion, all our members representatives will be away in the United States for the annual Global Gaming Expo (G2E). We would therefore, owing to the very important nature of this Bill, like to request an opportunity to give verbal evidence to the Portfolio Committee at a mutually convenient time.