Internet Gambling On Track South Africa

The South African government’s Department of Trade and Industry scrutinized the recent report presented by the Gambling Review Commission (appointed 2009 by the trade and industry minister), which ushered into a new phase of public consultations in Cape Town this week was attended by both land and internet gambling industry representatives.

Experts focused mainly on horse racing, bingo and internet betting. Discussions kicked off with the problems the horse racing industry currently faces, i.e. dwindling stakes and race meetings over the past decade, its place in the international horse racing arena. Truth be told, the Racing Association and bookmaking representatives are not on the same page when it comes to financial aid to the industry.

The Racing Association’s said the following: “In aggregate, as the cost of ownership is greater than the total stakes available, owners make a net contribution to the sport of horse racing in SA. With stakes remaining flat and costs increasing, the burden on thoroughbred racehorse owners becomes more burdensome each year. Owners currently fund the sport by over R570 million. They are under more financial strain now than they have ever been in the past. If the current system continues, owners will be forced out of the sport.”

The Association proposed that bookies, which earn a reasonable profit from betting on the horses, should make a donation to the industry; the latter remark was immediately refused, since the industry already received financial support from betting patrons.

Concerning the proposed withholding tax of 15% on all gambling winnings of R25 000 plus, the Association said it constitutes a “major threat” to the industry, and pointed out that it feels like being “penalized” under the present tax law as its losses are ring-fenced.

The bookies voiced their concerns when they said that it places the punters at risk since the Commission’s recommendation for person-to-person betting exchanges’ regulatory framework encourages these parties to operate without a license.

“Person-to-person exchanges will encourage unlicensed individuals to earn a living by acting as bookmakers,” said the associations for KwaZulu-Natal, Gauteng and the Western Cape.

Betfair welcomed the regulation of internet gambling, and proposed a standardized legislation throughout South Africa to protect players; the Bingo Association criticized the Commission’s recommendation that electronic bingo operations should be prohibited, in favor of the casino industry as they claimed. They also requested that the government should refuse the Commission’s report of bingo halls increase across the country.

Further hearings are planned before the report goes to Parliament.