South Africa will regulate online gambling

April 27, 2009

South Africa is going a new and very interesting way to regulate online casinos.

According to the CEO of the National Gambling Board (NGB), Thembi Moja, the local online gambling market will finally be regulated in a couple of months after years of debates.

10 licences will be granted to operate an online casino in South Africa. The gaming servers of the operators must be in South Africa. The process of who can apply and who might be able to run an online casino legally in SA is not decided yet to our knowledge. One can hope it will be a fair process and no corrupt elements will be part of it.

What makes the South African approach different compare to any other countries is the tight regulations of financial transaction.Every player needs to have a dedicated gambling account with any SA bank and this account can only be funded by credit card. The Reserve Bank will monitor these accounts together with the banks and a maximum balance of R20.000 will be allowed.

The Internet Gambling Tax Bill provides for a 6% tax of the gross gaming revenue. Take into consideration the local online gambling markets is estimated to already be between R400 Million to 1 Billion, this gambling tax will bring the state a substantial amount of money.

It is another try from a country to make money from internet gambling through regulations, but the problem remains the same. The Internet doesn’t have borders. The reality is that a SA operator will have the benefit to market his products on TV, newspapers and any website in South Africa, but has a huge disadvantage to most other global operating online gambling company. These organizations are set up in a way that they pay next to no taxes and the will have automatically more money to spend of marketing and player retention.

Why should a South African go through the hassle of opening a gambling account? A simple Google search will offer him tons of casino better offers and maybe even better service. What happens if you win R100.000 in a SA online casino? You are only allowed to have R20.000 in you gambling account?

The fact of the matter is, before we don’t have a global set of internet laws and regulations, countries will always say: We must fight illegal online gambling and online casino operators will always say: These countries are fighting us, we never even consider moving our operations there and start paying taxes.

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South Africa releases the Interactive Gambling Tax Bill 2008

April 26, 2009

In 2006 the National Gambling Board in South Africa released a report outlining the necessity for legalizing online gambling in South Africa; highlighting the fact that land-based gambling and online sports betting were already existent. In response the South African government tripled their efforts to get the ball rolling on this project and to ensure that effective regulations (especially in the form of control systems geared at identifying problem gambling, money laundering, and other criminal activities) were put in place.

Now two years later online gambling is one step away from being legalized in South Africa and the government is now on the verge of tapping into the millions of dollars in tax revenue the industry generates.

South Africa’s Minister of Finance, Trevor Manuel, has released for comment the Interactive Gambling Tax Bill, a special tax law on interactive gambling, which will impose a 6% tax on gross gambling revenue from internet gambling.

The tax is provided for in the National Gambling Amendment Bill, an amendment to the National Gambling Act, which did not provide for legalized interactive gambling. The amendment, therefore, allows for online gambling, which will be strictly regulated and monitored.

Several gambling operations in South Africa are waiting in the wings for the passing of the Interactive Gambling Tax Bill. One such operation is Betting World, a sportsbetting site, which intends to add online Poker to its gambling offering. Other smaller gambling sites will also benefit from the anticipated influx of new Players who will now take comfort in knowing that they can bet online without any hassles.

The Interactive Gambling Tax Bill will be tabled in Parliament during the first half of 2009. Comments on the legislative proposals must be sent to the Treasury before March 1, 2009.

The full text of the Bill can be found on the Treasury’s website.

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