South Africa has long had issues with illegal gambling, and it seems that today they are more pronounced than ever before. The country’s complex, troubled history played a part in this situation and is important in understanding how it developed.
The first South African gambling regulation was enforced in 1673, when gambling was banned in all its forms. Severe punishments were meted out for anyone found to be breaking the law, and this remained the status quo for almost 300 years.
In 1965 the rules were slightly relaxed when horseracing, and placing bets on the races that were run, were classified as sporting activities and were finally permitted. Soon after, possibly because enjoying this limited form of legal gambling made people want more options, illegal casinos began to flourish during the 1970s.
By the mid-1990s, the estimated number of illicit establishments had mushroomed to well over 2000. However, the abolishment of Apartheid brought with it a major overhaul of gambling law. This sea change was realised in 1996’s National Gambling Act.
The hope with the Act was that it would boost tourism and raise taxes for the fledgling democracy, and with that in mind it established a licensing system for casinos, made provisions for the first South African lottery, and reclassified horseracing and betting as gambling rather than sporting activities.
In 2004, in the face of a growing online gambling presence, an amendment was added to the National Gambling Act. This prohibited playing or operating online casino, Bingo and Poker games based within South Africa, but did allow for digital sports betting. The National Gambling Board, which is still the country’s official regulator, was also established at this time.
Attempts to modify the law in 2008, by allowing approved online casino games’ licensing with the National Gambling Amendment Act, were ultimately thwarted. The opposition from anti-money laundering authorities and land-based casino owners was too strong and the Act wasn’t passed.
The rules were made even stricter in 2010, when playing in establishments operated by offshore companies was also banned. Incredibly stiff penalties for breaking this law were set, including fines of up to R10 million or jail terms of up to 10 years for operators, players and payment processors.
In spite of the 2010 legislation, online casinos in South Africa flourished and continues to do so. No individual has ever been prosecuted for playing in an offshore establishment, and the prohibition has had a significant financial impact because of the potential gambling tax loss.
Lessons From the UK
Advocates of legalising online casinos in SA point to the United Kingdom’s regulated industry as an example of how well this can work. The new laws and UK Gambling Commission that came into effect in 2006 allowed online gambling to grow into the largest single sector in Britain, with substantial tax revenues, while maintaining high standards of safety and fairness.
However, it doesn’t seem that South Africa will be following the United Kingdom’s lead any time soon as even stricter rules have been tabled in an amendment that is expected to be enacted soon. The likeliest scenario, say critics, is that illegal activities will continue apace, which makes it even more important to read up before you register with an gambling operator in South Africa.