OWN CORRESPONDENT, Johannesburg | Monday 2.00pm.
THE National Gaming Board has recommended in a report released on Monday that government regulate the Internet gaming industry, allowing the new export industry to bring in R6,1-billion per year in revenues, according to some estimates.
According to the report, offshore money is projected to account for 98% of the total. Experts say the worldwide industry is worth about $7-billion and growing at exponential rates.
Research convener, Peter Collins of the University of Cape Town Commerce Faculty, said that “in South Africa, it is incumbent on us to ensure that this new form of gambling exerts a positive impact and not a negative influence on the country’s economy and its people.”
To do this, Collins and the board recommend capturing revenue for government, and regulating the product available to the consumer. Since few South Africans have access to the Internet, and South Africa makes up one million of the 140-million Internet users worldwide, little increase is expected in South African gambling.
South African gambling is primarily domestic, and this offers an opportunity to access foreign currency and funds, says UCT Dean of Commerce, Professor Brian Kantor. “We must seek to make South Africa the jurisdiction in which the world’s leading Internet gaming providers operate and pay taxes here in preference to Europe, the Caribbean and Australia,” Kantor said.
“Ordinary corporate tax (30%) will apply, which we estimate will earn government R300-million in the first year if ten licences are awarded. A further 2% will be levied to create a development fund to advance broad-based empowerment, especially in education and training in the IT industry, the report continued. No explanation was offered for why operators would prefer to pay 30% corporate levies in South Africa rather than establish themselves in tax-havens like several Caribbean jurisdictions.
Other proposals in the report make provision for Internet gaming to be regulated and administered by the National Gambling Board, with high entry hurdles in terms of probity, technology standards and financial standing, and empowerment, rather than a competitive licensing process.
Political scientist Vincent Maphai said the computerised nature of Internet gambling makes addictive behaviour easier to spot, and precludes money-laundering.