1. SUBMISSION BY BETFAIR LIMITED
to the Portfolio Committee on Trade & Industry
in respect of the National Gambling Amendment Bill, B
22 August 2007

2. OUTLINE
Introduction
Presenters and structure (section 1 of written submission)
Summary of Betfair’s submissions (section 2 of written submission)
Betfair (sections 3 and 4 of the written submission)
Context (section 5 of written submission)
Scope of global regulated interactive gambling
The effect of prohibition
Substantive submissions (section 6 of written submission)
Exclusion of certain activities under the Bill (section 7 of written submission)
Undesirable practical impact of certain provisions and omissions (section 8 of written submission)
Conclusion and Recommendation (section 9 of written submission)
Q&A

3. INTRODUCTION Presenters and Structure Summary of Betfair’s submissions
Betfair and its aspirations in South Africa in the context of the Bill

4. CONTEXT: SCOPE OF REGULATED GAMBLING ON THE INTERNET
UK legal online gambling market in ZAR11.5bn
Online fixed odds
Online Poker
Online Casino
Exchange
Tote, 1%
31%
25%
30%
14%
Total P2P = 40%
Global legal online gambling market in ZAR90.6bn
Online sports
Online Poker
Online Casino ??
betting
25%
33%
42%
Total P2P = at least 25%
Source: Global Betting and Gaming Consultants 2007
1 GBP: ZAR 14.5

5. CONTEXT: THE EFFECT OF PROHIBITION
Global illegal gambling market in ZAR1,117bn
China
Other Asia US
ROW
50%
15%
30%
Compared to:
SA entire regulated
UK entire regulated
market – ZAR1.5bn
market - ZAR137.8bn
Source: Global Betting and Gaming Consultants 2007
1 GBP: ZAR 14.5

6. SUBSTANTIVE SUBMISSIONS – EXCLUSION OF CERTAIN FORMS
Background to the proposed exclusions
Any exclusion undermines regulatory objectives
No policy basis for the proposed exclusion
The proposed exclusion is discriminatory
If exclusion is justified, it can be circumvented
Parliament should anticipate future regulation of excluded forms

7. THE REGULATORY EFFECT OF PROPOSED EXCLUSION
Exchange
Online Poker
Online fixed odds
Tote, 1%
Player-to-player
Online Casino
25%
14%
Not regulated under Bill = inadequate control = inadequate protection

8. SUBSTANTIVE SUBMISSIONS – UNDESIRABLE PRACTICAL EFFECTS
Player protections not uniformly imposed on all providers
Bill is not technology neutral: favours existing gambling activities
Onshore server requirement handicaps regulatory objective
Age verification measures are inferior
Specific provisions undermine player retention and sustainability
Specific drafting creates uncertainty

9. THE COMBINED PRACTICAL EFFECT ON REGULATORY SCOPE
Exchange
Online Poker
Online fixed odds
Online fixed odds
Tote, 1%
Player-to-player
Online Casino
25%
14%
Outside scope of Bill = inadequate control = inadequate protection

10. CONCLUSION
Policy framework informing the Bill is both sound and achievable
Current draft of Bill demonstrates a less than comprehensive understanding of both policy and operational issues
Cumulative effect of the proposed exclusion of P2P and shortcomings of the Bill on operational matters impairs the Bill’s ability to achieve its policy objectives
High level solutions proposed by Betfair

11. The Bill in its current form should be rejected,
RECOMMENDATION
The Bill in its current form should be rejected,
and sent back to the dti in order to address the policy and practical shortcomings of the current draft