South Africa - Software vendors need licence

Chatmaster

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It seems like the South African government will require gambling software vendors to apply for licenses and...
Conditions for awarding such licences would include a commitment to socio-economic upliftment and to comply with broad-based black economic empowerment requirements, he says.

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Chatmaster

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What worries me even more is how they plan to implement this. Are they planning to police the Internet? If they do we are going to loose allot of our Internet freedom. If they don't plan on policing the Internet... Their ideas will only stay ideas. I cannot see why any software vendor will sacrifice a share of their profits to comply to some BEE requirement from the SA government. What this will mean instead is that software vendors would rather pull out from SA online gambling or ignore the licenses applications completely.
 

Vegasking

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BEE

:thumbsup:

Contrary to popular belief, BEE will not be enforced on the private sector by legislation. The codes have now been approved and gazetted by government and is binding only on state-owned entities and public companies.

One of the most common misconceptions about BEE is that it refers only to the transfer of ownership. The intention of the codes, however, is to be broad-based by including other areas or opportunities for transformation and upliftment. The outcomes of BEE must be far-reaching and sustainable.

Transfer of ownership itself has been abused and often becomes a situation where the owners sell a significant percentage of the equity to a black partner - often a single individual - and that's where transformation ends.

Three main 3 areas of transformation are Direct empowerment (ownership & managment), Human resource development (employment, skills dev) and Indirect empowerment (preferncial procurement, socio-Economic dev etc.)

At its core is a point system based on a scorecard, which will be applied by companies to measure BEE transformation against identified targets. A company's level of compliance with the BEE standards will be pivotal in securing government tenders, as well as securing other business and public company contracts.

Funny, I recently sold my Private company and even though it was Private, I still felt the pressure to build up my BEE credendials... Anyway, it is sold and I don't feel the pressure no more....

I still wish to see South Africa grow as a nation and provide much needed opportunity and reform to the impovrished sector!
 

jetset

RIP Brian
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Introducing legislation to enforce black empowerment would not, imo be an insoluble problem in a Parliament almost totally dominated by the ruling party, which has well over two thirds control of the legislative apparatus and the capacity to amend even the Constitution.

But this section of the above post represents one of the real motivations for getting into BEE:

Quote: A company's level of compliance with the BEE standards will be pivotal in securing government tenders, as well as securing other business and public company contracts.Unquote

That, and former state companies that have been privatised and apply the same criteria. Where the big money is, in short.

The poverty of the masses is being alleviated but not nearly in sufficient volume or fast enough, as is evidenced by growing frustration and urban unrest.

Despite an economy that has been performing well there is still way too much unemployment and crime, and there is a serious demand from the masses for more (free) government housing and services.

The frustration is being heightened by profligate spending by government officials on items that should have lower priority beneath combating poverty; massive armaments spending when we have no real enemies and the enrichment of individuals through BEE or government largesse that maintains a widening gap between the almost obscenely nouveau riche and the dreadfully impoverished.
 

jetset

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Update

SOUTH AFRICAN INTERACTIVE GAMBLING BILL IN TROUBLE?

Land gambling association recommends back to the drawing board

The proposed South African legislation to regulate and license online gambling in the country has run into more opposition - this time from the influential land casino industry, represented by the Casino Association of South Africa which has described the proposed law as "inadequate" and recommended that far more research and drafting is required.

Politicians have been debating the National Gambling Amendment Bill, but this week CASA took centrestage in a presentation to the National Assembly's trade and industry committee which is currently studying the Bill. CASA chairperson Jabu Mabuza said the industry supported in principle legalisation and proper regulation of interactive gambling.

However, the draft bill was inadequate in a number of respects, and should be referred back for "further research, stakeholder consultation and redrafting", he said.

"In our view the amendments as tabled do not do the job adequately."

The South African Press Association reports that Mabuza insisted it was important that everything possible be done to ensure that the advantages of legalising interactive gambling outweighed its disadvantages.

There had to be a level playing field, to ensure consistency and fairness. For example, interactive operators ought to pay a rate of tax no less than that paid by other sectors of the gambling industry, Mabuza asserted.

New interactive gambling operators should also be subject to no less stringent requirements regarding empowerment, probity, financial credibility, skills development, job creation, regulation, taxation, and measures to prevent underage gambling and the promotion of responsible gambling, than those applied to land-based casinos.

And it was essential interactive gambling legislation should comply with South Africa's commitments in terms of international treaties and conventions.

A number of other key issues, including establishing guarantees to cover debts to players and the fiscus, equal access to communication platforms, duplication of inspections, personal licenses, and the role of interactive intermediaries needed greater certainty and resolution, Mabuza continued, recommending that the Bill should go back to the drawing board to be improved.

South Africa had some of the world's most effective and well-formulated legislation governing land-based gambling, the CASA chairman reminded the panel, and therefore interactive gaming regulation should be both comprehensive and thorough.

"The current proposals do not accomplish that goal," Mabuza said.
 

Chatmaster

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Well what can I say? This was expected?

To a certain degree I am relieved that this is happening. On the other hand, once again a much needed bill is postponed.
 

jetset

RIP Brian
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Update

BETFAIR OBSERVER AT SOUTH AFRICAN ONLINE GAMBLING REGULATION HEARINGS

Elliott Kernohan upbeat about the development work behind proposed new law

Contrasting sharply with yesterday's attack on the National Gambling Amendment Bill by Casino Association of South Africa and Tsogo Sun chairman Jabu Mabuza (see previous InfoPowa report), the legal counsel for international gambling group Betfair gave the research work on the proposed Bill a thumbs up this week in an interview with MoneyWeb.

Elliott Kernohan, the legal counsel for Betfair was in South Africa observing the Department of Trade and Industry portfolio committee hearings on the proposed new legislation, which seeks to regulate and license online gambling at provincial level.

Kernohan told the business publication that Betfair was following developments with interest, because the legislation was aimed at protecting the public in an area where there was significant demand - online gambling.

"....you want to make sure that the protections that you provide are adequate, that they're enforceable, that they're able to be policed properly, and that they apply uniformly right across the spectrum of gambling that people want to participate in," he said.

Asked for an opinion on what he has observed thus far at the committee hearings, Kernohan said: "I think the DTI and the National Gambling Board have gone to great lengths over the last couple of years to really research the way that gambling has been regulated elsewhere around the world, and they haven't leapt into it.

"They've done their work pretty carefully and they've constructed quite a sensible and, if I may say, by global standards, quite a responsible - quite a high level of compliance is being required. And I think what we would like to see is those same good standards apply universally right across the range of Internet gambling activities that are currently available to South Africans who seek them out."

Questioned about provisions for probity checks on the directors of companies applying for licensing, Kernohan pointed out that without licensing and regulation there was nothing to stop a continuation of these shortcomings. However, under a regulatory regime applying such safeguards would be the responsibility of the provincial licensing authorities that the regulations envisaged, he said.

"I think the very point of this legislation and the reason why it's so important to South Africa, if it wants to protect the players, is to ensure that it provides for licence providers. And as part of that licensing process, they must ensure that they meet the standards of probity, that all of the necessary empowerment objectives are met," he added.

Asked why Betfair has not entered the South African market, as Piggs Peak had done, Kernohan said: "That's not the way that we do things. It's much more important for Betfair as an organisation to ensure that we're able to say to our players, look, we provide the standards of probity and protection and safeguards against problem gambling that you would expect to have in your home country.

"So where there is a country that takes the view that gambling should be regulated safely, we very much prefer to come in the front door, rather than be characterised and perceived as some of these other operators are. And, you know, in fairness you can't necessarily point the finger solely at Piggs Peak, who themselves would take the view that they're operating perfectly legitimately from a jurisdiction that's granted them a licence.

The interviewer referred to criticism of the proposed legislation by Mabuza and Derek Auret, Chief executive of CASA, and asked Kernohan whether he thought the DTI should "take these regulations back to the drawing board".

Kernohan said he did, but for different reasons to those expressed by the Casino Association representatives.

"Derek is focussing on some of the detail because he wants to be sure that the standards that his constituency has had to meet are applied across the board," he said, adding that he could accept that.

"But from our point of view it's slightly bigger than that. These requirements and these protections that are to be provided for South African players really need to be imposed right across the online gambling space. It doesn't matter whether you're an online casino or whether it's online poker or sports betting or anything in between, it's the perceived risks of transacting through the Internet that need to be addressed, and that's what we think needs to go back to the drawing board."

Read the interview here
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jetset

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Update - Sibanda defends regulatory proposal

SOUTH AFRICAN ONLINE GAMBLING REGULATION HEARINGS CONTINUE

Tax will constrain gambling growth, says government official

This week has seen a continuation of the South African government's Department of Trade and Industry hearings on the proposed regulation of online gambling (see previous InfoPowa reports)

According to the Business Day newspaper, the acting deputy director general for the DTI, Fungai Sinbanda told the trade and industry portfolio committee Monday that a tough taxation regime would constrain the growth of gambling feared by objectors to the proposed National Gambling Amendment Bill.

Sibanda told the committee that this was the policy framework within which discussions were taking place between the trade and industry department and the treasury on the taxation of internet gambling.

The absence of tax measures for internet gambling in the National Gambling Amendment Bill was a concern raised by the Casino Association of SA (CASA) during a public hearing this week. CASA chairman Jabu Mabuza said the tax regime would be fundamental in determining the success of internet gambling and its consequences for bricks and mortar casino operations, and he stressed that a level playing field should be the goal so as not to prejudice the existing (land) industry.

Sibanda said the bill could not include tax measures as this was the remit of the Treasury, which would have to introduce a separate money bill. The level and rate of tax will be determined by the policy approach which will be motivated by a desire to cap and limit the expansion of gambling. Taxation is a powerful instrument to control gambling activities, he said.

Sibanda said studies on internet gambling provided no convincing proof that existing casinos had been affected negatively by interactive gambling. [Land] casinos in SA were profitable and required no protection.

Sibanda rejected suggestions to give [land] casino operators the automatic right to operate interactive gambling, saying the two activities required different licences. Automatic licensing was in principle a bad idea. We believe licence applicants must prove that they are fit and proper and have the expertise to conduct this form of gambling.

He rejected criticisms that the bill was poorly researched and hastily drafted. It had been under consideration and widely consulted on since 2005, when a committee was established to formulate a policy approach on regulating internet gambling, he said.

Further investigation was needed on whether to allow person-to-person gambling or tighten restrictions on access of minors to internet gambling. The bill prohibits anyone other than bookmakers from providing player-to-player gambling.

A representative of the UK-based internet exchange betting company Betfair argued for inclusion of player-to-player gambling. It objected to the requirement that licensed providers locate all their interactive gambling equipment in SA.
 

jetset

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Update

SOUTH AFRICAN ONLINE GAMING NO COMPETITION FOR LAND INTERESTS


Internet gambling will involve only about 2 percent of the gambling population compared with the 80 percent engaged in land-based casino activity

The South African publication Business Day reports that Internet gambling will involve only about 2 percent of the gambling population compared with the 80 percent engaged in land-based casino activity, according to the South African government's Department of Trade and Industry.

The figures were used to rebut claims by the Casino Association of SA that the introduction of online gambling would have a negative impact on its land casino members.

There is no apparent threat to the land-based casino [industry] from interactive gambling, DTI acting deputy director- general Fungai Sibanda told Parliaments trade and industry committee this week, claiming that the market would determine the financial viability of internet gambling.

Sibanda was responding to suggested amendments to the National Gambling Amendment Bill made by gambling operators, civil society and religious groups. The bill will legalise and regulate internet gambling for the first time in South Africa.

Sibanda also rejected the demand by casino operators that they be automatically licensed to operate internet gambling, saying there was no known jurisdiction in the world that gave automatic licences.

The licensing process had to be transparent, fair and open to allow new players into the industry. Sibanda stressed that person to person betting exchanges, as proposed by UK operator Betfair, would not be introduced before research into its implications was finalised - and this was a long way off.

Regulations issued by Trade and Industry Minister Mandisi Mpahlwa will determine the registration and verification process for all players.
 

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Update

SOUTH AFRICAN ONLINE GAMBLING ACT APPROVED

National Gambling Amendment Bill approved by Parliament

After years of research and weeks of intensive special hearings (see previous InfoPowa reports) the regulation of online gambling in South Africa moved forward this week, achieving parliamentary approval.

The National Gambling Amendment Bill introduced by the Department of Trade and Industry (DTI), legalises Internet gambling by creating legislation for the licensing of interactive gambling operators.

In terms of the proposed legislation, software vendors providing online gambling platforms will be required to obtain a national licence for key staff, as well as the interactive software itself, related equipment and the suppliers and maintenance providers of that equipment. Probity and technical checks will be a prominent feature of the process, thoroughly investigating each applicant for licensing.

The goal of the bill is to protect players, ensure gambling revenue reaches the fiscus, retain interactive gambling players in SA, and prevent underage or problem gambling.

The next step in enacting the Bill will be for it to be accepted by the National Council of Provinces, which may have to hold another round of public hearings before this can be achieved. Once the Bill is universally accepted, it will be referred to South African president Thabo Mbeki for promulgation, after which it will be gazetted in to law.

The taxation issue, which existing land operators are concerned should ensure a level playing field, is yet to be finalised.
 

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Update

S.A. POLITICIAL PARTY BACKS ONLINE GAMING REGULATORY BILL


Provided it is done properly, regulation is the best way to go, says Kwa Zulu Natal politician

The National Gambling Amendment Bill, which introduces a regulated and controlled online gambling regime in South Africa in preference to banning the Internet pastime has received the support of the Inkatha Freedom Party.

In a speech to the National Assembly this week, the party's Professor E.S. Chang said that with the great technological developments and the rapid expansion of the Internet and other interactive communications, it was inevitable that gambling would move to this domain.

"Whether we do or do not approve, or agree with it, the reality of the situation is that interactive gambling is taking place in South Africa, and is currently not regulated. What is particularly alarming about the current non - regulation of interactive gambling is the ease with which underage children [may] have access to this activity and the scope for the development and expansion of criminal activities," he said.

Chang cautioned against the belief among many people that gambling might be the answer to their financial troubles.

"They think that if they can just win one big jackpot, all their financial woes will be over. It is the people who can least afford to gamble, the poorest members of our society, who are usually the worst affected by this vice. They end up becoming addicted and ultimately losing their hard earned money which leads them even further into poverty," he said.

He therefore added that the relevant authorities must be aware and take action against some of the concerns raised if this bill is to truly attempt to regulate interactive gambling.

"We must remove all criminal and illegal elements and activities from gambling while at the same time ensuring that the most vulnerable members of our society are protected and taught about the harsh realities of gambling and the need to gamble responsibly, Chang said.

"There are economic benefits to be gained from the efficient regulation of interactive gambling such as additional revenue to the national fiscus, increased investment and job creation. These benefits must not, however, be pursued at all costs and at the expense of the social ills that interactive gambling will cause if it is not properly regulated. I also hope that the relevant authorities have the necessary capacity and expertise to regulate this form of gambling as the interactive environment is very dynamic and constantly changing.

"The IFP supports this bill."
 
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