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Gambling

According to the NRGP,1 over 250 000 gamblers called the national help-line in the tax year period ending 2014.2 Considered to be afflicted with a psychometric disorder diagnosable by strict clinical criteria, pathological or compulsive gamblers are unable to control their gambling. This leads to significant damage to themselves and others.3

But let’s look on the bright side. According to Pricewaterhouse Coopers, gambling in all its forms – casinos, racing, sports betting, bingo, and the lottery games – was expected to generate revenue of R30.3 billion in the 2019 South African economy.4 That translates into a massive tax fillip for the fiscus,5 not to mention major employment for skilled and semi-skilled personnel. So gambling is good as well as bad.

Prior to 1996, all gambling in South Africa was illegal except for betting on horse races. Of course, there were also hotel casinos in the former ‘homelands’. The Constitution then established that gambling and wagering were legally competent, and so it became necessary to coordinate matters on a provincial and national level. Thus, the National Gambling Act 1996 was promulgated. This established the National Gambling Board precisely for that purpose.

That Act was repealed in 2004 by the National Gambling Act 2004, and this statute now provides for all matters concerning these industries. (To say that the Act is rather complicated is to put it mildly.) It falls under the authority of the Minister of Trade, Industry and Competition, and it is largely administered by the National Gambling Board.

It goes without saying, perhaps, that there are very strict controls concerning gambling activities. After all, those positive and negative aspects about gambling (referred to above) must be marshalled quite closely.

A ‘gambling activity’ is one which involves:

  • placing a bet – that is, staking money (or anything of value) – with a bookmaker6 on any event or occurrence of which the outcome is uncertain or unknown, until it happens;7
  • accepting a bet as a bookmaker;
  • placing, or accepting (as a bookmaker) a totalisator bet;8
  • bingo, or another other gambling game or an amusement game.

A. Prohibited and restricted activities

  1. It is a criminal offence:
    • to engage in, conduct or make available a gambling activity in relation to an event or activity that is itself illegal – dog fighting, for example;
    • to allow any machine, equipment, software, device, etc. to be used for such purposes;
    • to maintain or operate any premises for such purposes;
    • to allow any premises to be used for such purposes.9
  2. It is a criminal offence to engage in, conduct, or make available any gambling activity except:
    • if it is licensed – either under the Act, or a provincial law; or
    • if it is social gambling which is licensed or allowed in terms of provincial laws; or
    • an informal bet – which is when no one involved is a bookmaker (or professional gambler); and if no one involved makes some gain from the activity other than winning the bet; and no one intends there to be any legally enforceable contractual relationship.10 11

  3. It is an offence to engage in, or make available a gambling game on the internet except if it can be accessed in licensed premises, and the licensee is authorised to make the game available for play.12

  4. It is an offence to give credit to anyone for the purposes of gambling, except as provided for in terms of the Act.13

  5. It is a crime (knowingly) to pay any winnings from a gambling activity to a minor; or to an excluded person; or to any other person who won the winnings in an unlawful gambling activity.14

  6. In fact, such winnings must be remitted to the National Gambling Board, which holds them in trust pending an investigation. If you fail to do this, it is equally an offence.15

B. Premises

  1. You may not:
    • maintain or operate any premises for the purposes of gambling;
    • allow any premises under your control to be used for gambling;
    • permit anyone on premises under your control to engage in a gambling activity,

    unless the activity in question, and the premises, have been licensed. It is a criminal offence to contravene these provisions.16

  2. In fact, if you own, maintain, operate or have control over any premises, and you have reason to believe that they are being used (or have been used) for any unlawful gambling activity, you must report this to the relevant provincial licensing authority, and to the National Gambling Board as well. If you fail to do so, you commit an offence.17

  3. It is a criminal offence to place or operate a cash dispensing machine (that is, an ATM) within:
    • a designated area;18
    • five metres of the public access point(s) to a designated area.19 20
  4. It is an offence for a licensee not to comply with the standards prescribed by regulation for the design, use and maintenance of his licensed premises.21

C. Minors

  1. It is an offence for a person under the age of 18 years (in other words, a minor) to:
    • enter any area within any licensed premises where any gambling game is available to be played (that is, a ‘designated area’);
    • operate a gambling machine or gambling device;
    • conduct, or make available a gambling activity;
    • engage in social gambling or any gambling activity other than an amusement game; or
    • falsely claim to be 18 years of age or over, in order to:
      • gain access to a designated area within licensed premises;
      • gain access to a gambling machine or gambling device; or
      • engage in, conduct or make available a gambling activity.22
  2. It is an offence falsely to claim that a minor is 18 years of age or over, in order for that minor to:
    • gain access to a designated area within licensed premises;
    • gain access to a gambling machine or gambling device; or
    • engage in, conduct or make available a gambling activity.23
  3. No licensee, licensed employee, or a person in control of licensed premises, or of a gambling machine or gambling device, may knowingly permit a minor to:
    • enter or remain in a designated area within such licensed premises;
    • operate that gambling machine or gambling device;
    • conduct, or make available a gambling activity within such licensed premises; or
    • engage in social gambling, or any gambling activity, other than an amusement game, within such licensed premises,

    and it is an offence to do so.24

  4. In fact, these persons are obliged to take reasonable measures to determine accurately whether or not a person is a minor, before permitting that person to do any of those things, and they commit an offence by not doing so.25

D. Excluded persons

It is possible for someone to be registered26 as an ‘excluded person’ –whether voluntarily, or because a court has ordered this, because it considers it just and reasonable to prevent the person from engaging in any gambling activity.27

  1. It is an offence for any licensee, employee, person in control of licensed premises, or a person in control of a gambling machine or gambling device, knowingly to permit an excluded person to:
    • enter or remain in a designated area within his premises;
    • operate any gambling machine or gambling device;
    • conduct, or make available any restricted gambling activity, or an activity licensed as social gambling, within those premises; or
    • engage in social gambling, or any restricted gambling activity within those premises.28

  2. Furthermore, that licensee, employee, and person in control are each obliged to take the measures prescribed by regulation to determine accurately whether or not a person is an excluded person, before permitting that person to do any of those activities, and it is an offence not to do so.29

  3. Every licensee must make available, at each one of its licensed premises:
    • the prescribed form to be used by a person wishing to register as an excluded person; and
    • a directory of local recognised counselling, treatment or education services addressing the problems of compulsive and addictive gambling,

    and it commits a criminal offence by not doing so.30

  4. Every licensee must, also, prominently post a notice advertising the availability of those materials, in the prescribed manner and form, at every entry to those premises, and it commits a criminal offence by not doing so.31

E. Advertising and promotion of gambling

  1. It is a criminal offence to advertise, or promote any gambling activity in a false or misleading manner.32

  2. It is a crime to advertise or promote any gambling activity (other than an amusement game) in a manner intended to target or attract minors.33

  3. All advertisements for gambling activities (or for gambling machines, devices and premises at which gambling activities are available) must include a statement34 warning against the dangers of addictive and compulsive gambling. Contravention of this directive is an offence.35

  4. No advertisement may, directly or indirectly, promote or encourage the removal of a person from the register of excluded persons. Contravention of this prohibition is an offence.36

  5. It is an offence to advertise or promote any gambling or related activity as being available to the public free of charge, or at a discounted rate (if this is not authorised in terms of the Act) as an inducement for gambling.37

F. Limited payout machines

These are gambling machines which have restricted limits on the pay out. Think of the so-called slot machines, aka ‘one-armed bandits’.38 Together with bingo, these were reported to be the fastest-growing segments of the gambling industry.39

  1. It is a criminal offence for a site operator40 not to permanently display, at the entrance to the designated area in question, his licence (and a copy of the licence of the so-called route operator, if applicable).41

  2. The site operator must also maintain adequate control and supervision, of all limited payout machines (LPMs) at the site, during the licensed hours of operation. He commits an offence by not doing so.42

G. Gambling machines and devices

  1. Every gambling machine and gambling device must be registered in terms of the Act,43 and it is an offence to contravene this provision.44

  2. You may not import, manufacture, transport, sell, lease, possess, maintain or alter any machine or device for gambling unless authorised to do so in terms of the Act (or provincial law), and to do so is an offence.45

  3. It is also an offence to possess, or make available for play, a gambling machine or a gambling device if you have not registered your ownership and possession with the relevant provincial licensing authority.46

  4. A notice, warning of the dangers of compulsive and addictive gambling, must be posted on the front of every gambling machine; and at all points of purchase on premises utilised by a bookmaker or at totalisator. It is an offence not to do so.47

  5. Every machine and device made available for play must be certified, in accordance with standards as determined in terms of the Standards Act 1993.48 It is a crime to contravene this provision.49 50

  6. Every person whose business is to import, manufacture, sell, lease, make available, distribute, maintain or repair gambling machines and gambling devices must keep a record, in the prescribed manner, of every one that he acquires, manufactures, sells, or distributes. It is an offence to fail to do so.51

  7. All machines and devices manufactured in or imported into the Republic must have incorporated (into the design of the machine or device) a mechanism that permanently identifies:
    • the name of the manufacturer;
    • a unique serial number; and
    • the date of its manufacture.

    The manufacturer or importer, as the case may be, commits an offence if it does not have such a mechanism.52

  8. It is an offence to remove, alter, disfigure, obscure or destroy such an identification mechanism.53

H. Registration of ownership

  1. All machines and devices manufactured in, or imported into the Republic must be registered with the Board, and the manufacturer or importer in question (as the case may be) commits an offence if he fails to do so.54

  2. The person registered as the owner of a gambling machine or gambling device is criminally liable if its possession, use, maintenance and certification is not in compliance with the Act.55

  3. It is an offence to transfer ownership of a gambling machine or device without the approval of the provincial licensing authority.56

  4. The same applies to the transfer of possession, and to leasing. It is an offence to do so without approval from the provincial licensing authority.57

  5. It is, in fact, an offence for the registered owner to retake possession without notifying the authority.58

I. Employees

  1. It is an offence to engage in any work within the gambling industry unless you have a valid national employment licence, or a provincial employment licence, permitting that particular work.59

  2. It is a criminal offence for a licensee to employ anyone (including an existing employee, for particular work) who does not have such a licence.60

  3. The licensee, as employer of such a person, must also disclose all information (as is prescribed) concerning the employee, to the applicable licensing authority.61

  1. The National Responsible Gambling Programme is an organisation drawn from regulators and the gambling industry. Amongst other valuable services, it offers well-informed advice, from suitably qualified counsellors, at the toll-free number 0800 006 008; or, send ‘HELP’ to 076 675 0710. ↩

  2. http://responsiblegambling.org.za. ↩

  3. Ibid. ↩

  4. www.pwc.co.za s.v. ‘Gambling Outlook’. ‘Revenue’ means the bets wagered, less winnings paid out. ↩

  5. Indeed, according to the PWC report, ‘the Government generates billions in governing taxes and levies from legal gambling’. ↩

  6. Somebody who bets with members of the public or with other bookmakers. ↩

  7. This is called a ‘contingency’ in the Act. ↩

  8. This is when the winnings are divided amongst those who placed a winning bet in proportion to the amount they staked, i.e. pro rata. ↩

  9. Section 7 read together with section 80. ↩

  10. Social gambling and informal bets are excluded in this chapter, when reference is made to ‘gambling’. ↩

  11. Section 8 read together with section 80. ↩

  12. Section 11 read together with section 80. ↩

  13. Section 13 read together with section 80. ↩

  14. Section 16(2)(a) read together with section 80. ↩

  15. Section 16(3) read together with section 80. ↩

  16. Section 10(1) read together with section 80. ↩

  17. Section 10(2) read together with section 80. ↩

  18. See C.1 for this meaning. ↩

  19. This is the prescribed distance. Regulation 7 of the Government Notice R1342 contains further prohibitions on the placing of ATMs. ↩

  20. Section 17(1) read together with section 80. ↩

  21. Section 17(3) read together with section 80. ↩

  22. Section 12(1) read together with section 80. ↩

  23. Section 12(2) read together with section 80. ↩

  24. Section 12(3) read together with section 80. ↩

  25. Section 12(4) read together with section 80. ↩

  26. The National Gambling Board is obliged to maintain a national register of such persons. ↩

  27. Section 14. ↩

  28. Section 14(10) read together with section 80. ↩

  29. Section 14(11) read together with section 80. ↩

  30. Section 14(12)(a) read together with section 80. ↩

  31. Section 14(12)(b) read together with section 80. ↩

  32. Section 15(1)(a) read together with section 80. ↩

  33. Section 15(1)(b) read together with section 80. ↩

  34. The form and manner of this statement is prescribed. See regulation 3 of Government Notice R1342 of 12 November 2004. There are certain exemptions – for example, advertisements in trade publications targeted at the industry. See Regulation 3(3). ↩

  35. Section 15(2)(a) read together with section 80. ↩

  36. Section 15(2)(b) read together with section 80. ↩

  37. Section 15(3) read together with section 80. ↩

  38. Originally, in pre-electronic days, these machines had a single lever, on one side, used to spin the reels – hence ‘one arm’. You can work out the ‘bandit’ part yourself. ↩

  39. See the PWC report cited in reference 4 above. ↩

  40. A ‘site’ means premises licensed for the placement of these so-called LPMs. ↩

  41. Section 18(7)(a) read together with section 80. ↩

  42. Section 18(7)(b) read together with section 80. ↩

  43. Unless it is of a category exempted by ministerial regulation. ↩

  44. Section 22(1) read together with section 80. ↩

  45. Section 9(1)(a) read together with section 80. ↩

  46. Section 9(1)(b) read together with section 80. ↩

  47. Section 15(2) read together with section 80. ↩

  48. Certain categories of machines and devices are exempted from prohibition by regulation. Playing cards, and dice are examples. See regulation 8 of Government Notice R1342 of 12  November 2004. ↩

  49. Again, there may be exemptions. ↩

  50. Section 19(2) read together with section 80. ↩

  51. Section 20(1) read together with section 80. ↩

  52. Section 20(2) read together with section 80. ↩

  53. Section 20(3) read together with section 80. ↩

  54. Section 22(1) read together with section 80. ↩

  55. Section 22(4) read together with section 80. ↩

  56. Section 23(1) read together with section 80. ↩

  57. Section 23(2) read together with section 80. ↩

  58. Section 23(3) read together with section 80. ↩

  59. Section 28(1) read together with section 80. ↩

  60. Section 28(2) read together with section 80. ↩

  61. Section 28(3) read together with Ssction 80. ↩

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