Charges fly in KwaZulu gambling war

KwaZulu-Natal has decided to close down its 2 000-odd illegal casinos and grant a few licences for big outfits. But the political wrangling is not over yet, reports Ann Eveleth

PLAYERS jockeying for position in the highstakes game that is casino gambling in KwaZulu-Natal are finding themselves confronting powerful political and economic interests in the province, a Mail & Guardian investigation has found.

At stake are five mega-casino-complex licences allocated to the province by the Vehan Commission. The provincial government is expected to open tenders for the lucrative licences, as soon as the province’s estimated 2 000 illegal casinos are closed.

But a successful - if temporary - supreme court bid by illegal casino operators allied to the Gambling Association of South Africa (Gasa) to delay the closure of their businesses has started a verbal Cold War between supporters of small-time gambling and the large consortiums anxious to get their fingers into the province’s gambling pot.

The result has been a flood of allegations and counter-allegations of political influence-peddling by vested interests.
Hardest hit has been the Inkatha Freedom Party, with wide-spread speculation that Premier Frank Mdlalose’s early “retirement” - which comes into effect at the end of the month - was hastened by gambling pressures.

Nor has the party been helped by its recent admission that it received R50 000 from Gasa, and that IFP leader Mangosuthu Buthelezi attended a secret meeting with Gasa representatives.

The latest revelations to rock the party are that IFP MP Kisten Rajoo was involved in planning a casino for some of the controversial Ingonyama Trust Lands. Minority Front MP Amichand Rajbansi this week demanded an inquiry into the matter.

The M&G established this week that:

* In mid-1995, Rajoo did, in fact, approach several fellow IFP members in the provincial government -including former finance MEC Senzele Mlhungu, Mdlalose, education MEC Vincent Zulu and welfare MEC Gideon Zulu - with plans to bid for casino licences in several areas under the control of chiefs.

According to documents in the M&G’s possession, Rajoo also had plans for developments ranging from IFP offices to clinics to hotels, all of which would revert to the chiefs “upon capitalisation”.

At the time, Rajoo was a member of Parliament’s Ad Hoc Committee on Gambling and Lotteries Legislation - a position he says he gave up in mid-1996 when legislation was passed barring politicians from having casino interests.

Rajoo said he also has relinquished plans to build casinos and is instead looking for “outside casino bidders” to provide them “for the benefit of rural communities”. But he plans to continue with his other development projects.

* Buthelezi has been listed as a trustee for Rajoo’s KwaZulu-Natal Development Company, “subject to Government of National Unity approval”. Rajoo said this week Buthelezi declined the post.

While these revelations support allegations of close ties between gaming interests and the IFP, other sources say influence peddling in the industry crosses political boundaries.

It “dates back to the arrival of the first slot machine in South Africa”, said one source. “First the National Party allowed Sol Kerzner to get a monopoly in the homelands, then other big groups tried to get a foothold by sweetening national politicians. As the NP dragged its feet over the implementation of a broader industry, the small guys decided to sweeten the provincial governments.”

“If everybody involved is sweetened,” the source added, “the process could drag on forever.”

Gasa treasurer Ish Maharaj said the IFP has been “unfairly targetted”.

He added: “Our members have given donations to many political parties. It wasn’t the IFP, but the supreme court which agreed to extend our deadline,” he said.

But Maharaj echoed claims by Rajbansi that the KwaZulu-Natal government’s decision to close illegal casinos was an “about-face” by portfolio committee members.

Both argue that it was Sun International that put pressure on the government to close the illegals.

Another mysterious convergence of political interests was the appearance of Durban multi-millionaire businessman Vivian Reddy at a 1995 meeting with the IFP’s Rajoo, Mhlungu and several chiefs.

Reddy was linked to the Sarafina II donor controversy last year and also has several African National Congress-linked business projects.

Reddy told the M&G this week he had attended only this “exploratory” meeting, but declined to join Rajoo’s consortium in favour of “a 100% South African black empowerment consortium with no links to any political party or union” which intended bidding for a casino licence in the province. He also plans to bid for casino licences in Gauteng and the Free State, he said.

While the illegal casino owners - like all the other role-players linked to this conflict - describe themselves as “clean”, they too have questionable linkages.

* Gasa’s coordinator and legal representative Bob Douglas was the author of the widely discredited International Freedom Foundation-funded Douglas Commission into alleged ANC atrocities in exile. Maharaj said he was hired because “we liked his presentation”, but other sources said his selection was “carefully chosen to appeal to the IFP government”.

While Gasa maintains it represents a number of small and medium-sized businesses, Maharaj himself owns Durban’s Millionaire Casino, the Palm Beach Hotel, the PLM Hotel and the Maharaj Lodge. “We are small in the sense that the Palm Beach cost R10-million, while the Wild Coast cost R500-million,” he said.

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