Interactive Gambling Regulations

1. Presentation to the Portfolio Committee of Trade and Industry (Committee) on the Regulations for Interactive Gambling (IG Regulations) 12 August 2009 Interactive Gambling Regulations

2. Delegation • Zodwa Ntuli: Deputy Director General Consumer and Corporate Regulatory Division (CCRD) Telephone: (012) 394 1537 • Mpho Mosing: Director Regulated Industries, CCRD Telephone: 012 394 1504 • Themba Marasha: Chief Operations Officer, National Gambling Board (NGB) Telephone: 012 394 3800 • Tlotliso Polaki: Secretary of the Board, NGB Telephone: 012 393 34800

3. Purpose The purpose of the presentation is to: Address questions raised by Committee on the IG Regulations Outline substantial inputs received from stakeholders on the IG Regulations Present possible amendments to the regulations pursuant to Committee briefing and stakeholder consultations To afford the Committee an opportunity to provide inputs on the proposed amendments to the IG Regulations 3

4. Responses Question How are minors protected in the regulations from access to interactive gambling activity? Answer protection of minors are amplified in the registration and banking requirements, and the issuing of username and password for registration, a player will have to fill in an NGB Form 10 the bank has to stamp the form confirming banking details and the identity of the bank account holder the form with banking details and stamp will be submitted to operator by prospective player, including certified copy of the identity document and any form of proof of residential operator upon receipt will verify with the banks the account number and identity once verified the operator will issue username and password for access to games. should it happen that a minor does access interactive games, money won will not be accessible as the funds should be paid to a nominated account held by an adult Operator found transgressing face suspension or revocation of a license, and also face criminal sanctions 4

5. Responses Question Concurrency with provinces and NGB, where are these 10 licenses going to be located? Answer Due to the borderless nature of IG, licenses will be issued nationally by the National Gambling Board. The location of the operators will be spread across the Republic. This will be done through a licensing process to ensure an equitable spread. The spread of the licenses will take into account the number and geographic spread of the existing license casinos the period of validity of the interactive gambling licenses and collection of tax BBBEE empowerment Job creation and opportunity for new entrants in the industry Competition and efficiency of operation within the gambling industry 5

6. Responses Questions Regulations must Exclude cell phones from interactive gambling Answer We recognize the concern about allowing cell phones however: It will be impractical for the operator or NGB to trace the communication tool used IG requires a player to have internet in order to interact communication tools that can access the net are different and include mobile phone To exclude mobile phones regulations would have to define mobile phone, and given the technological developments this will certainly prove to be difficult especially considering different mobile phones such as blackberry & cell phones with 3G cards Restricting the use of mobile phones will be an artificial restriction that will not achieve the intended purpose 6

7. Responses Question How do we ensure that this legislation acts as a catalyst in the poor communities? Answer The licensing process will determine location of operator to ensure equitable spread of benefits to provinces The Act empowers the Board to impose license conditions that will ensure commitment of the IG Operator to contribute to: community development initiatives based on revenue generated and programmes for treatment of problem gambling and addiction 7

8. Responses Question How is NGB dealing with illegal operators advertising in South Africa when the activity is still illegal Answer Court challenge Action was taken against Piggs Pigg for offering interactive gambling in the Republic (Gauteng case) The court of first instance held that the activity is illegal is the Republic and should not be offered to South Africans Piggs Pigg is appealing the decision arguing that because the server in based in Swaziland the gambling activity is therefore offered in Swaziland This continues to be a challenge but NGB will continue to act against these illegal operators Coordination with other government departments/agencies Interventions with Department of Communication to prohibit broadcasting interactive gambling related activities Explore Electronic Communication Act provisions for cyber inspectors - together with Gambling inspectors NGB may enhance monitoring and enforcement Constant monitoring of the web is required and capacity and skill is currently being acquired so as to fully attend to this challenge. Cost of violating the regulations must be high to deter non compliance – severe sanctions such as revocation 8

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17. Thank you