Leisure & gaming in the post US era

Looks more promising for regulatory instead of prohibitionist.

Published: Monday, December 18, 2006 Online-Casinos.com

SOUTH AFRICAN ONLINE GAMBLING LATEST

"We believe we can much more effectively regulate this by having a clear licensing system in place"

In an interview in the South African press this weekend, deputy director-general of the Department of Trade and Industry, Astrid Ludin expanded on the news that the South African Cabinet has approved a regulatory instead of prohibitionist approach to online gambling.

By doing so, South Africa joins countries such as the UK, Italy, Spain and Belgium in taking a more progressive line on a popular pastime (see previous Online-Casinos.com/InfoPowa reports). South Africa's initiative is based on two years of in-depth international research by a specially appointed committee.

Ludin pointed out that the 2004 Gambling Act required government to introduce within two years effective legislation regarding Internet gambling, and that the approach the government has now adopted is that the activity should be regulated rather than prohibited.

Explaining the rationale behind the decision, she said that South African experience had shown that prohibition does not stop the activity from occurring. "It's not going to be a free-for-all," she said. "There is going to be player registration and basically licensing. So unless you're licensed as a player you're not entitled to gamble. And we are not permitting cellphone gambling. We're permitting only games that are played on the Internet."

Ludin expanded on her statement by pointing out that although the Internet could be accessed by some cellphones, many others did not have this capability, and gamblers would in any case be required to hold an account with funding restrictions with a licensed service provider. She said that the socio-economic impact of regulation had been assessed, and commented: "The sense is that there will not be a significant impact (by Internet gambling) because of restricted access to computers."

The deputy director-general added that the next step would be a public consultation process before the regulatory amendment was submitted to Parliament. "We're only publishing this for comment; it's not proceeding to Parliament at this stage," she said.

Ludin said that online gambling will be controlled by a system of registration through a licensed service provider whose server is registered. "That's where your enforcement would come through as well. You could track the transactions. The service provider must get proof of your identity," she said, adding that this would exclude underage gamblers.

Problem gamblers would be provided with a self-exclusion facility available to the person involved, or to his or her dependents, and gamblers in this category would not be permitted to open or hold accounts.

Registered players would be required to have an account with a licensed service provider, and this account would have to have limits, she revealed. Gambling on credit cards would not be permitted, and winnings would only be paid back to the player account. "You can't use your credit cards," she emphasised.

The account and registration system would also combat any money laundering attempts, she claimed, saying: "Through registration you can track transactions."

Asked to draw comparisons with the United States, Ludin pointed out that the USA had much higher connectivity and argued that prohibition demanded more resources than regulation. "(But) let me just say that you need a lot more resources to prohibit this than you need to effectively regulate it," she said. "The US has the resources to prohibit, I don't think we do.

"We believe we can much more effectively regulate this by having a clear licensing system in place. That allows you to identify unregistered activity and clamp down on it. It also provides through the monitoring of the service providers to verify any unauthorised activities."