Online casino fights gambling ban

Online casino Piggs Peak has been granted leave to appeal the North Gauteng High Court ruling on August 20 banning online gambling in South Africa, drawing out an already lengthy battle to legalise their operations in the country.

The Swaziland-based casino has been locked in a scuffle with the Gauteng Gambling Board over the right to advertise and operate in South Africa.

While the appeal process is still in its early stages, the Gauteng Gambling Board is already investigating — should the online casino’s appeal fail — if it can seize profits since Judge Neil Tuchten’s decision in August, according to the Daily Maverick.

“Even though the leave to appeal was granted by the court, the games haven’t been tested against South African standards and the games are not licensed by South African gaming regulators which put online gamblers at risk of being manipulated,” said Lucky Lukhwareni, the head of legal services at the Gauteng Gambling Board.

At issue is where the gambling takes place. In August, the court found that even though Piggs Peak’s servers are based in Swaziland, it was still possible for a gambler in Gauteng to connect with the online casino, which constitutes online gambling.

Online gambling operators, players and anyone who advertises online gambling in South Africa could face a fine of R10-million or 10 years in jail, or both.

Silversands, an international online casino operating in South Africa, earlier made the decision to exclude local players from participating in their games until there was certainty on the legality “of gaming in cyberspace” for South African players.

In an email sent by Silversands management to local punters on September 1, the casino said South Africans would no longer be able to gamble on the site, but their accounts would remain accessible.

On Thursday, a Silversands employee told the M&G that the online casino was open for local business, but “we don’t know for how long”.

According to Lukhwareni, “when the gambling law was crafted, online gambling was not part of gambling then but according to the Gauteng Gambling Act, online gambling is forbidden”.

“The law says that if you are not licensed by us then you are in breach of the law,” said Lukhwareni.

A notice on African Palace’s site stated that the online casino had “decided to permanently suspend all casino activities at African Palace Casino until the highest court in South Africa makes a final decision regarding the legality of online gambling in South Africa for South African players”.

A date has not yet been set for the appeal, which will be heard in the Court of Appeals in Bloemfontein.

According to a preliminary report of the portfolio committee on trade and industry on the review of the national gambling legislation, dated March 11 2010, gambling was restricted in South Africa from as early as 1673. According to the Gambling Act of 1965, all forms of gambling, except betting on horse racing, were banned. Gambling was however legalised in the former homelands of Transkei, Bophutaswana, Venda and Ciskei and by the 1970’s, casinos had already started operating in these areas.

In October 1994, the Lotteries and Gambling Board published an interim report chaired by Professor NE Wiehahn in which it was argued that “the Gambling Act, 1965 (Act No 51 of 1965) no longer reflected the true moral viewpoint of the majority of South Africans and that it should be legalised”.

Threat of the fine
According to the preliminary report of the portfolio committee on trade and industry on the review of the national gambling legislation, there was general consensus in the submissions that interactive gambling was a challenge. However there was disagreement on whether or not it should be legalised. One of the key challenges was that regardless of the government’s stance on online gambling, foreign gambling sites would continue to offer services within South Africa.

According to the National Gambling Board, “the South African public should remain wary of the fact that online gambling/interactive gambling is illegal in South Africa”.

When pressed to explain how the government would enforce a ban on online gambling, Lukhwareni said they could follow the example of the United Stated, “wherein different stakeholders will be warned to stop assisting these illegal operators”.

He said the threat of a fine should also serve to deter anyone participating in the illegal activities.

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