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Emily D. Swoboda

South African Regulatory Bill Inches Closer to Parliamentary Approva

19 May 2008

Interactive Gaming News has learned that the South African National Assembly has endorsed amendments to the National Gambling Amendment Bill. The bill, introduced in December 2006, may this week receive long-awaited parliamentary approval.

Elliott Kernohan, general counsel, corporate M. & A., Betfair, told IGN that the bill will this week be put to a closed session of the full National Assembly for a final vote. If approved, the bill would go to Thabo Mbeki, South Africa's president, for assent.

The National Assembly's Portfolio Committee on Trade and Industry on May 9 agreed unanimously to the National Council of Provinces' recommendations on advertising -- a process which has held up approval of the bill for several weeks.

While in September 2007 the bill was initially approved by the National Assembly, the lower house of Parliament, it remained at the National Council of Provinces, the upper house, for the next six months as legislators labored over advertising regulations -- whether to allow interactive gaming operators to advertise or ban gambling advertising altogether.

Many of South Africa's provinces argued at a National Council of Provinces committee meeting in March of this year that a ban on interactive advertising was unconstitutional, and recommended that interactive gambling be given the same advertising rights as the rest of the country's gambling industry.

In the end, the provinces' argument appears to have won out as the Portfolio Committee has recommended that advertising be permitted by licensed Internet gaming operators. Furthermore, the committee has recommended the minister of the Department of Trade and Industry be empowered to regulate interactive gambling advertising.

Mr. Kernohan, who has been involved in lobbying the bill, noted that while the bill is a positive step for South Africa, it regulates online casino gaming, exclusively. Online poker, bingo, sports betting and all other forms of interactive gambling therefore remain unregulated, which, he said, could engender a good deal of public confusion.

"When it becomes law suddenly there's going to a big announcement that you can legally play I-gaming in South Africa, when in fact it's not all true," Mr. Kernohan said. "It's only a small part of the available activity."

Mr. Kernohan predicts that despite South Africa's good intentions, its law will prove limiting to foreign operators with ambitions of entering the market.

"The restrictions [imposed] on potential licensees, including some very tight customer verification requirements and the requirements to have all of the gaming servers located in South Africa -- combined with what is looking to be a very high tax rate by international standards -- is going to mean that the opportunities in this market are probably open only to the existing land-based casinos," he said.

"I wouldn't say that there is going to be a lot of investment from many new players in South Africa. There are still regulations to be published, so we shall see what results," Mr. Kernohan said.

South African Regulatory Bill Inches Closer to Parliamentary Approva is republished from
Emily D. Swoboda
Emily D. Swoboda