South African Province Bans Internet Gambling

When national legislation on online gambling is side-tracked, provinces or states start making their own decisions.  This time not in the United States or Canada but in South Africa. Unfortunately, this time round in Gauteng, South Africa’s main province declared that online gambling is not legal.  This could spell severe problems with regard to online gambling in the country in future.   It’s unfortunate, since South Africa just came out of a recession and the loss of potential tax revenue from online gambling could have been utilised toward social welfare and local infrastructure. 

North Gauteng High Court issued judgement on August 20 by Judge N.B. Tuchten, it clearly states that online gambling transactions based in South Africa are illegal.  The judgment further stated that both the domestic online gambling operator who offers such service to South African citizens for gain and the player who commits to any online gambling could be found guilty of violating the law.

Judge Tuchten’s decision was delivered in the long running case in which the operators of the Swaziland based online casino Piggs Peak Online challenged the jurisdictional authority of South Africa. Their argument was that the presence of the online casino and its physical location were in a neighbouring country and South African law/s are not applicable.

The provincial Gauteng Gambling Board immediately informed the media that online gambling is illegal and that it would prosecute offenders.  The Business Times newspaper reported that several other parties to the online gambling process would come within the ambit of the law. These include Internet service providers who host online gambling web sites and financial institutions that permits payments for the online betting transactions.

Organizations that advertise or facilitate the advertisement of online gambling, this includes radio and television stations, print media and outdoor advertising agencies, will be considered as conducting illegal activities. The Gauteng Gambling Board announced that persons who are prosecuted and found guilty of engaging in online gambling could receive a fine of 10 million rands ($1.369863) or ten years in prison or both.  Lucky Lukhwareni, head of legal services of the Gauteng Gambling Board, told the newspaper, “That’s why we approached the media to alert them of the judgment which makes online casino operations illegal, and if they continue we will have them arrested and fight for conviction.”  The South African ban could be a small step backwards for online gaming companies. South Africa’s online gambling market’s worth is estimated at $140 million. 

The national government in South Africa stipulated its intent to legalize and regulate online gambling.  Unfortunately this entire issue is caught-up in investigatory commissions and parliamentary debates.  Meanwhile the national government has remained mum on the provincial action in Gauteng.