Evidence wa ka Ngobeni
The South African National Gambling Board, the statutory body charged with the regulation of the gambling industry, has spent hundreds of thousands of rands on developing legislation aimed at regulating Internet casinos.
The gambling board confirmed this week it paid more than R900 000 to an Australian firm, DGS, to develop a draft regulatory framework on online gambling.
Thousands of websites offer some form of wagering an expansion in recent years that has alarmed opponents of gambling and put increased focus on the laws that govern Internet gambling across the world.
Gambling in South Africa is governed by the National Gambling Act of 1996. It has no regulations on Internet gambling, where betting often crosses borders and jurisdictions.
Online gambling establishments contend that their practices are legal in the countries in which they operate and thus they can ignore laws in force in other countries.
South Africa is “confronted with the fact that online gambling cannot be prohibited”, says Chris Fismer, chair of the gambling board.
At this stage, Fismer says, South African law is inadequate to deal with the onslaught of virtual gambling and the government is unlikely to be able to prosecute offshore casino operators operating in cyberspace. Minister of Trade and Industry Alec Irwin has also raised concerns about the problems presented by Internet gambling.
“It is clear that the only viable option is to ensure that online gambling is regulated and monitored by the gambling board,” Fismer says.
The decision to develop regulations for Internet gambling follows a report compiled by a group of University of Cape Town academics, who conducted research on online gambling on behalf of the board.
They raised numerous concerns about Internet gambling, including the complex security problems presented by cyberspace technology. Unlike land-based casinos, with online gaming, the noise is digitally recorded, the coins are minted in a software shop and the “slot” handle is the mouse of the home PC.
Finding a casino on the Internet is easy. At Gambling.com, for example, there are links to gambling websites, information on downloading gaming software and reviews of top online casino sites.
Users are asked to register their credit card numbers in order to place a bet for the games, which include blackjack, all the variations of poker, baccarat, craps, roulette, keno, scratch cards and slot machines.
Hackers who gain access to the casinos’ systems can alter the algorithm the fundamental design of a computer program to increase payouts in their favour or steal other customers’ credit card numbers. Some sites explored by the Mail & Guardian warn users to be wary of hackers and guard their passwords.
Fismer believes Internet gambling could have some societal benefits including better monitoring of users’ records, especially of compulsive gamblers. He says the real problem is that even if it might be desirable to halt the development of online gaming, it is unlikely that any government can do so.
He says within the envisaged regulatory framework, South Africa’s major casino operators could apply for a licence to provide their clients with online gambling services. This would help the government keep records of the activities of the online casino, to impose taxes and other regulations.
It is not clear whether independent companies would be allowed to apply for online casino licences within the new regulatory framework, which is expected to be finalised by next year. Fismer says the proposals will be available within four months and will be presented to Parliament later this year.
However, the regulatory framework is likely to face a barrage of criticism from churches and civic organisations. Last week the Anglican Bishops of Southern Africa raised fears that making gambling more broadly available could result in an increased incidence of compulsive gambling and a lack of spending in other areas of the economy.
Anglican Archbishop Njongonkulu Ndungane discouraged the extension of gambling opportunities in the country until the impact of the current deregulation is addressed.
South Africa has 24 casinos, and a further six licences have been issued in KwaZulu-Natal. Other gambling activities include the national lottery and horseracing.
Ndungane says this is already damaging communities. “The money that families invest in Lotto tickets or slot machines does not fall from the sky. It comes at the cost of the family food budget, or granny’s medication or the children’s school uniforms.”
Fismer says the government has no option but to develop legislation to regulate Internet gambling. “Those who say we must prohibit Internet gambling should advise us on how to do so, because as far as we are concerned it is not possible to prohibit these sites from operating.”
Many online casinos are registered in the Channel Islands or countries like the Dominican Republic, where the laws pertaining to money are fairly lenient. The transaction the computerised taking of a bet and the exchange of funds both occur in the Caribbean. South African law prohibits the transaction of huge amounts of money to foreign countries. “But how do you enforce that?” asks Fismer.