Introducing the National Gambling Bill, 2003 Select Committee Cape Town 3 September 2003

Overview of presentation Background to Bill Objectives and principles of new Bill Overview of the industry Scheme of the Bill Detailed overview of the Bill

Background Why a new Bill? –Amendments proposed to Gambling Bill in 2000 and agreed at MinMec in 2001 –Drafting reformulations recommended for greater clarity –Several fundamental issues currently in regulation better supported by legislation –It is desirable to consolidate the law

New provisions introduced Bill reenacts existing provisions and introduces new ones –Outlaws certain activities and all unlicensed gambling activities –Introduces prohibitions, requirements and standards to address problem gambling –Introduces a system of registration of gambling machines to deal with illegal gambling –Clarifies single national electronic monitoring system –Introduces a system of national licenses –Establishes norms and standards for provinces –Establishes the National Gambling Policy Council

Objectives of changes To clarify concurrent national/provincial jurisdiction To give effect to co-operative governance To provide for economic unity To ensure tighter control over gambling, especially illegal gambling To recognize the potentially negative socio- economic impact of gambling and the public policy objectives and to put in place mechanisms to deal with this

Consultation Extensive consultation with provinces, as main issues related to clarification of jurisdiction – Bill reflects agreement with provinces and PLAs Bill published for comment, but only 3 weeks (18 August) given for comment due to Parliamentary requirements - comments still accepted up to 29 August (effectively 5 weeks) Workshop held with industry and public interest groups Comments incorporated and Bill circulated to interested parties to prepare for public hearings due to short publication period

Overview of the Gambling Industry Background Gambling was legalised in 1994 on the basis that it was not possible to outlaw gambling and that it be better controlled if it was regulated; In this context, four public policy objectives were identified: –BEE –Employment creation –Creation of new fixed investment and infrastructure –Generation of revenue

Overview of the Gambling Industry Size of the industry The gambling industry, including the National Lottery, currently generates about R6.8billion in gross revenue every year; Total revenue for government from gambling (excl lotteries) is just under R500 million per annum; Most popular forms of gambling: –Casinos (70% of GGR), Horseracing (17% of GGR), National Lottery (13% of GGR), Bingo (less than 1% of GGR), LPMs?

Overview of the Gambling Industry Meeting the public policy objectives BEE: 43% equity holding by empowerment companies; however, difficulties arising from financial arrangements Employment: estimated 50,000 direct and indirect jobs –Gauteng (13,500), Eastern Cape (7000), Freestate (2000), North West (1000) Revenue Generation: R492 million (March 2002) gross revenue Gauteng (58%), Eastern Cape (12%), Western Cape (12%), KZN (10%), remaining provinces account for 8% of revenue Infrastructure: R11.7 billion in investment

Overview of the Gambling Industry Problem gambling No of problem gamblers as a proportion of regular gamblers is about 50% higher than in developed countries Incidence of problem gambling 1% of population with easy access to gambling activity Canada (1.6%), Australia (2.3%), New Zealand (1.3%), UK (0.8%) Need for proper control, especially over illegal gambling, protection of minors and monitoring of social impact

Overview of the Gambling Industry Legal framework and administration Concurrent jurisdiction has resulted in contestation and legal challenge Duplication of functions, hampering economic activities occurring on a national level

Scheme of the Bill Policy Council NGB Policy making Review proposals for NNS & Regulations Dispute resolution Consultation National legislation Structures Policy Advice Propose NNS Review National Licensing Maintain CEMS Monitor NNS National registries Council Secretariat Functions Provincial Legislation Structures 9 PLA’s Functions Licensing ito prov. law Policy ma Monitoring of machines via CEMS National licensing ito national law subject to NGA review Maintenance of data registries required by national law Inspection & enforcement of all National & Provincial law in provinces DTI Promulgate regulations Develop legislation Disclosure & reporting

Questions and clarification

Detailed overview of National Gambling Bill, 2003

Chapter 1: Interpretation and Application Definitions Application: does not apply to Lotteries

Chapter 2: National Gambling Policy Part A: Gambling Activities Defines –gambling activity generally; –bests and wagers; –gambling games; –pay-outs and opportunities to play further

Chapter 2: National Gambling Policy Part B: Prohibited gambling, restricted activities and status of gambling debts Prohibits illegal gambling; all unlicensed gambling activities except for informal bets; unlicensed dealing in machines or gambling devices; use of unlicensed premises; unauthorised interactive gambling; gambling by minors; credit for gambling; Provides for voluntary exclusion and imposes requirements

Chapter 2: National Gambling Policy Part B: Prohibited gambling, restricted activities and status of gambling debts Places restrictions on advertising Provides for enforceability of debts through legal gambling activity (unenforceability of debts by minors and excluded persons)

Chapter 2: National Gambling Policy Part C:Gambling Premises Standards for gambling premises –Introduces new provisions to address concerns related to the overstimulation of gambling (proximity to schools, having a cash machine on the premises, notices) Sites for LPMs (currently in regulation)

Chapter 2: National Gambling Policy Part D:Registration and certification of machines and devices Requires registration and identification of gambling machines or devices Provides for national register of machines and devices and their registration Provides for transfer of ownership or possession Requires testing agents to be licensed Calibration and certification of machines and devices Regulations for LPMs Requirement for LPMs to be linked to CEMS

Chapter 2: National Gambling Policy Part E: Licensing of persons employed in gambling industry Requires all employees to be registered

Chapter 3: Jurisdiction and Licensing Part A: Jurisdiction Outlines jurisdiction and responsibilities of PLAs and NGB Clarifies oversight function of NGB Requires PLAs to keep and share information Provides for conflicts in concurrent jurisdiction Provides for Ministerial powers to make regulations iro norms and standards

Chapter 3: Jurisdiction and Licensing Part B: National Licenses Authority of national licenses Applications for a national license Authority to issue a national license National license procedures Review of refusal to issue national license Review of proposal to issue national license Suspension and revocation of national license

Chapter 3: Jurisdiction and Licensing Part C: Provincial Licenses National norms and standards Maximum number of casinos licenses (by regulation, with transitional measures) Limitation of rights of a license Amusement games and machines

Chapter 3: Jurisdiction and Licensing Part D: Licensing Norms and Standards License criteria, categories and conditions Disqualification for employment licenses Disqualification and restrictions for other licenses Disqualification after license issued Acquisition of interest by disqualified person

Chapter 3: Jurisdiction and Licensing Part E: Additional Norms and Standards Economic and social development issues to be considered and conditions to be attached –BEE, overstimulation of gambling to be considered in license renewal annually; consistency with Liquor Bill Competition issues to be considered State interests License requirements, acquisitions and transfers

Chapter 3: Jurisdiction and Licensing Part F: License Investigations, decisions, transfer and surrender External probity reports Decisions License transfers Surrender of license

Chapter 4: National Structures Part A: National Gambling Policy Council Establishment, functions and meetings Part B: National Gambling Board Continuation, objects and functions, provincial relations, composition of Board, conflicting interests, resignation and removal from office, meetings of the Board, Committees, Remuneration of Board and staff, finances and accountability

Chapter 5: Enforcement and Offences National Inspectorate Functions and powers of inspectors Breach of confidence Hindering administration of Act Self-incrimination Failure to comply Offences and breaches of license condition Penalties Serving documents Proof of facts

Chapter 6: General Provisions Regulations Repeal of laws and transitional arrangements

Schedule 1: Transitional Provisions Definitions General preservation of rights State interests National Gambling Board National Licenses Development of interactive gambling policy and legislation Transitional maximum no of casinos Excluded persons

Questions and clarification