South African authorities are going ahead with restrictive new gambling regulations despite massive protests.
Independent and industry experts are speaking out about how these new measures will cause a lot of difficulties in how they do business. They are labeling them as very restrictive and nonsensical. However, the government is not backing down and will go ahead.
South Africa’s gambling sector
Many people want the gambling laws in South Africa to open up so they can make more money. However, many traditionalists want even heavier restrictions.
As a result of the ongoing strict policies, the black market for gambling is thriving. This means that countless South African residents go to offshore gambling companies for their gambling. Therefore, none of this money will go into the state coffers.
The blanket ban on gambling was lifted in 1994. A comprehensive licensing system came in with the National Gambling Act in 1996.
The National Gaming Board has been in charge since then. Each of the nine provinces in South Africa can license its own online sportsbooks and land casinos. There was a further opening up of gambling laws in 2004 through a new National Gambling Act.
Online casinos still are not legal, despite many attempts over the years by various parties to legalize them.
Authorities have clamped down on offshore operators offering online casino to South African residents. It is now a crime for residents to use these platforms and they will face charges if they are found guilty of this offense.
Stiff penalties and possibly lengthy prison times can also be levied on the operators themselves. However, most of these operations are overseas and nothing much can be done to them. Therefore, these illegal offshore online casinos still operate without any consequences.
Growth in Africa gambling sector
Africa is one of the last large untapped markets in the world. As levels of disposable income increases in the region and more people get onto the internet, more money will inevitably flow to gambling operators.
Exponential increases have been seen throughout the continent recently. In 2017, the industry in Africa was worth more than $2bn (£1.54bn), up from $1.93bn (£1.49bn) the previous year.
There are more people in Africa with mobile phones than bank accounts. Therefore, as more mobile payment options become available, it will become easier for Africans to deposit funds to their gambling accounts.
South Africa issues
South Africa is one of the chief nations behind the growth of African gambling, along with Kenya and Nigeria. Substantial growth is forecast for South Africa’s gambling sector, but the upcoming changes may negate that.
If the government imposes tighter regulations, it could have consequences for gambling in the rest of Africa, including harsh penalties for players and operators alike.
Minister for Trade and Industry Rob Davies is pushing this bill. He has been working on this issue for the past couple of years, and he brought this proposal to the legislature at the start of 2018. One of his main goals is to lower the levels of problem gambling in the country.
One of the more controversial aspects of the bill is lesser protection for key industry stakeholders. The authorities would be able to confiscate winnings made through illegal platforms.
There is also a move to ban dog racing. There will also be a lot less competition if this bill passes because smaller gambling operators would lose their licenses. That would leave only the giants of the industry, which lowers the chances for a competitive environment.
Is this bill feasible?
The consensus about the bill is that it contains a lot of flaws and some of the proposals are not very feasible or realistic. For example, it would be a massive task for financial institutions to block any transactions involved unlicensed gambling operators.
The bill also contains awkward new rules for physical gambling establishments. These public venues would be required to have entrances that are hidden or out of sight. ATMs in the area near or inside of a gambling venue would not be allowed.
There would be limits on the number of licenses and gambling machines in the country, advertising practices would be severely curtailed, and smaller operators will have much stricter requirements.
Nevertheless, the government looks adamant about pushing through this bill, which would likely cripple the burgeoning gambling sector in the country.
