ATC210216: Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on the National Gambling Amendment Bill [B 27B - 2018], dated 16 February 2021

NCOP Trade & Industry, Economic Development, Small Business, Tourism, Employment & Labour

Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on the National Gambling Amendment Bill [B 27B - 2018], dated 16 February 2021

 

The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour, having considered the subject of the National Gambling Amendment Bill [B 27B - 2018] (National Assembly – sec 76), referred to it, reports as follows:

 

1. Introduction

 

The National Gambling Amendment Bill [B 27B – 2018] was one of the Bills that was not finalized by the 5th Parliament. The Bill was revived by the National Council of Provinces in the 6th Parliament and referred to the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on 17 October 2019.

 

2. Purpose of the Bill

 

• To amend the National Gambling Act, 2004, so as to amend and delete certain definitions;
• to provide for the procedure for the forfeiture of unlawful winnings to the National Gambling Regulator;
• to provide for the quorum to make a final decision in the second meeting with the majority of the members present in that meeting;
• to provide for the dissolution of the National Gambling Board;
• to provide for the establishment of the National Gambling Regulator;
• to provide for the appointment of the Chief Executive Officer and Deputy Chief Executive Officer in the National Gambling Regulator;
• to provide for the powers of the national inspectorate to curb payments emanating from illegal gambling activities;
• to enhance the powers and duties of the gambling inspector;
• to provide for transitional arrangements; and
• to provide for matters connected therewith.

 

3. Process followed on the Bill

 

The Bill was revived by the National Council of Provinces 17 October 2019 during the 6th Parliament. The Chairperson of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour forwarded the correspondence to the relevant Portfolio Committees in the Legislatures to inform them of the processes to be followed with regard to the Bill.

 

The Select Committee was briefed on the Bill by the Department of Trade, Industry and Competition on 16 July 2019.  The period 18-27 November 2019 was set aside by the National Council of Provinces for Permanent Delegates to brief the respective Portfolio Committees in the Provinces. The intention was to familiarize the new members with the contents of the Bill. There were different views from Provincial Committees on the processing of the Bill. During their interactions on the Bill, some provinces agreed to submit the final mandate of the 5th Parliament with the signature of the current Speaker. Some preferred to start the process from the beginning. All provinces provinces submitted their final mandates.

 

4.  Concerns raised by the Provinces in the 5th Parliament

4.1 Establishment of the National Gambling Regulator (NGR)

 

• Provinces raised concerns regarding the proposed establishment of the NGR without a board structure regarding issues of corporate governance. With the above in mind, it is however proposed that the NGR is established in line with other entities of the Department of Trade, Industry and Competition (the dtic) after considering the dtic research on agency rationalization.
• The dtic regulators which had adopted the governance model of the Board structures presented governance challenges. Other entities with similar governance structures (single head with no external board) include the Public Protector, the Companies and Intellectual Property Commission (CIPC), the National Consumer Tribunal (NCT), the National Regulator for Compulsory Specification (NRCS), the National Consumer Commission (NCC), the Competition Commission, etc.
• There are regulators whose mandates extend even beyond the South African borders and cover a wide range of target groups even though the industries they regulate are not subject to concurrent jurisdiction, however these mandates apply, impact the specific industry nationally and have succeeded in performing efficiently with a CEO and Deputy CEO. The National Credit Regulator’s market regulates financial institutions and its consumers and has a debt book of over 1 trillion rand, which is much bigger than the market size of the gambling industry.
• The National Gambling Board has for the past six years been led by an Administrator, and it has successfully achieved 100% of its performance targets year on year, and has received a clean audit for the past consecutive years.

 

4.2 National Central Electronic Monitoring System (NCEMS)

 

• Provinces were concerned that NCEMS which is currently monitoring Limited Payout Machines (LPMs) will be extended to all modes of gambling. Issues were raised that Casinos and Bingos already have their own monitoring systems and Provincial Licensing Authorities have access to this information when it is needed.
• The intention to extend the NCEMS to other modes of gambling is to consolidate information throughout the country for all legal modes of gambling.
• The NGB currently has an exclusive mandate over the NCEMS for the LPMs mode of gambling. The system exists and has already been developed at the cost of the NGB.
• The NCEMS is a national register as set out in the National Gambling Act (NGA), 2004 and this function will ensure that the NGR continues to work as a central repository of gambling information in addition to that which is already required in terms of the national registers.
• Existing monitoring systems at various gambling venues will continue to function as normal.
• The output of NCEMS will supply the Provincial Licensing Authorities (PLAs), manufacturers, and operators with valuable intelligence in terms of the gambling sector performance both at provincial and national levels. The information can also be used for reporting of national statistics, as well as for determination of taxes and levies.
• The NGR will be directly accountable for the information collected as opposed to the status quo where PLAs have to rely on operators to provide that information.
•  This will not interfere with the functions of the PLAs, but will rather strengthen their ability to regulate. The NGB monitors compliance of PLAs and simultaneously has to ensure that the operators licensed by PLAs are compliant.
• This is in line with international auditing standards that whilst PLAs source information or data from operators for the imposition of taxes they should also have a 3rd party source which will be the NGB to verify the information or data received from the operators. This will not only contribute to adherence with uniformity and consistency of norms and standards but also reporting of illegal financial transactions.
• NCEMS being an IT system will improve efficiencies, financial reporting, industry performance reporting and provide reliable information for auditing purposes.

 

 

 

4.3 National Gambling Policy Council (NGPC)

 

• The amendment empowers the majority of the members present in the second meeting of the NGPC to make a decision if in the first meeting there was no quorum. Most of the provinces opposed this provision.
• The proposed insertion of section 63A serves to empower the NGPC to be progressive in its decision making in that they would be able to deliberate on matters before NGPC and in the second meeting the motion may be passed.
• Section 63(7) of the NGA stipulates that the NGPC may establish the rules of procedure.  The decision to insert section 63A was fulfilled by the NGPC in its meeting of 12 March 2018, which was quorate where the NGPC members agreed that the Bill may proceed to Cabinet for introduction to the National Assembly (NA).
• This proposed amendment is thus simply giving effect to an executive decision that was already made, and any contrary proposal would be tantamount to a disregard for the separate of powers doctrine entrenched in the Constitution.
• During the certification of the Bill by the Office of the State Law Advisor, the vote of the majority of members at the second meeting was seen as a policy decision that is rational as it serves legitimate government purpose.
• It was found to meet constitutional imperatives from a cooperative governance point of view in that this was a collective decision of both National and Provinces.
• Given the independence of provinces, the Minister is not empowered to administratively ensure attendance of meetings by MECs.
• Failure by the NGPC to meet has negative implications for gambling regulation in South Africa due to lack of harmonization in gambling laws and policy.
• Other options were suggested for addressing the quorum. Disbanding the Council will result in not giving effect to the Constitution and the risk of conflict with regard to policy and legislative development may rise and this will pose challenges as opposed to solutions. Round-robin ordinarily is utilized to cast a vote on matters which have been deliberated. Passing of motions have been attempted through round-robin and has proven not to be a viable option.

4.4 The National Inspectorate

 

• Issues of autonomy and independence of the Provincial Inspectorate were raised, where National Inspectors are allowed to investigate without prior approval of the province and without being accompanied by the Provincial Inspectors.
• Section 76A provides for additional powers of the National Gambling Inspectors that they may act with or without Provincial Inspectors to investigate illegal gambling activities. This is for those cases where the Provincial Inspectors are not available to accompany the National Inspectors.
• The drafted wording of ‘With or Without Provincial Inspectors’ as an approach, aims to ensure in instances where action has to be taken to combat an illegal activity and upon consultation, the PLA is unable to assist, the NGR can intervene.

 

5. Consideration of final mandates

 

The final mandates were submitted as follows: three provinces voted in favour of the Bill: four provinces voted against the Bill and two provinces abstained from voting.

Provinces	Status
Eastern Cape	Abstained from voting
Free State	Voted against the Bill
Gauteng	Voted against the Bill
KwaZulu-Natal	Abstained from voting
Limpopo	Voted in favour of the Bill
Mpumalanga	Voted in favour of the Bill
Northern Cape	Voted in favour of the Bill
North-West	Voted against the Bill
Western Cape	Voted against the Bill

 

 

 

6. Outcome of Committee’s consideration of the Bill

 

NCOP Rule 155(2)(b) determines that for a question which does not fall under section 75 of the Constitution to be decided, the supporting vote of at least five provinces must be attained. The Committee was therefore unable to take a decision on the Bill and reports the Bill [B 27B – 2018] as referred to it to the Council.

 

7. Conclusion

 

• The technical errors with regard to insertion of dates and signature in the final mandates should be forwarded to relevant provinces to be rectified.

 

Report to be considered.