Chairperson, hon members, members of the press and the public in the gallery, I'm honoured to participate in the Second Reading debate of the National Gambling Amendment Bill of 2008 in the National Council of Provinces today. In doing so, I'm fulfilling my obligations in terms of the National Gambling Act of 2004, which requires the Minister of Trade and Industry to introduce to Parliament legislation for the regulation of interactive gambling and to do so by way of an amendment to the National Gambling Act.
The current reality is that some of our citizens are participating in on- line gambling in South Africa, but the environment in which this is taking place is unregulated. This piece of legislation is therefore being introduced to protect consumers against the various risks and dangers such as addiction and problem gambling that take place within an unregulated environment.
After the draft Bill was approved by Cabinet in December 2006, written comments were received from stakeholders and the department held several public consultation meetings. The draft Bill was then introduced in the National Assembly on 26 July 2007. The Portfolio Committee on Trade and Industry held public hearings leading to the adoption by that committee.
Against this background, it is a pleasure for me to now introduce the debate on the National Gambling Amendment Bill after deliberations by the Select Committee on Economic and Foreign Affairs, as well as provincial legislatures. The Select Committee on Economic and Foreign Affairs adopted the Bill on 12 March 2008, after receiving final mandates from provinces indicating their respective views on the Bill. With your permission, Chairperson, I wish to use this opportunity to express my heartfelt gratitude to both the select committee and the provincial legislatures for their excellent advice that contributed to the further strengthening of this Bill, thereby improving its quality.
The debate in the select committee was primarily focused on the socioeconomic impact of gambling in general. The concerns raised by hon members and members of the public relating to problem gambling, exposure to gambling by minors and vulnerable groups and the facilitation of money laundering, among others, are all valid concerns. They confirm the view that we must extend protection and ensure an effective regulatory environment to rein in unbecoming behaviour by operators.
As such, this amending Bill should be viewed as "public interest protection" legislation as it seeks to, among others, protect consumers against the over stimulation of gambling, protect our jurisdiction against criminal elements involved in money laundering and create a safe environment for those who desire to participate in gambling activities as a pastime.
In order to achieve the goal of creating a safe and protected environment, the Bill addresses the issues of player protection, problem gambling, advertising, money laundering, enforcement and compliance, licensing, provision of interactive gambling games and others, such as taxation.
Allow me to touch briefly on some of these aspects. With respect to player protection, the Bill provides that each and every player who engages in interactive gambling be registered with a licensed interactive gambling provider. Strict verification procedures that are compliant with the Financial Intelligence Centre Act and in a prescribed form will need to be complied with. Verification procedures, such as attaining a sworn statement - in a prescribed form -that a player is 18 years or older and that the jurisdiction in which they reside does not prohibit interactive gambling, will ensure that minors do not have access to interactive gambling.
In addition, credit providers will not be allowed to extend credit to players and there will be a dispute resolution mechanism for recourse where disputes arise. The Bill will make any gambling activity provided by an unlicensed provider unlawful and will prohibit South African players from engaging in interactive gambling activities with unlicensed providers.
One of the key fears with regard to interactive gambling is its round-the- clock accessibility and availability. This ease of access makes potential problem gambling a serious concern. The Bill, therefore, provides that an interactive gambling service provider will be required through licensing conditions and regulations to ensure that there is an electronic system for the monitoring and reporting of registered players. Players will be required to set limits on accounts. The principle of "know your customer" will apply and providers will be required to audit playing patterns and behaviour. Players will be exposed to self-diagnosis systems and notices on the websites of interactive gambling service providers in respect of voluntary player exclusion and treatment of addictive gambling in accordance with the objects of the National Responsible Gambling Programme.
With regard to advertising, hon members would recall that advertising interactive gambling was prohibited in terms of the Bill as amended by the Portfolio Committee on Trade and Industry. However, after concerns with the discriminatory nature and therefore the constitutionality of the prohibition, the select committee deemed it prudent to amend the Bill to reintroduce advertising, albeit under very strict conditions and subject to regulations prescribed by the Minister. Unlicensed operators, however, will not be allowed to advertise interactive gambling anywhere in the republic.
As far as money-laundering is concerned, the Bill will be governed by the requirements of the Financial Intelligence Centre Act. One of the main thrusts of the provisions on money laundering is that the Bill requires that gambling equipment, which includes the server and other key records of players' transactions, be located in South Africa. This requires all licensed interactive providers to have a presence in South Africa. This will also be in line with the existing company law. Key aspects, such as the registration of players and verification of player identity, as well as allowing players from selected countries that comply with the Financial Action Task Force or designate organisations, only to engage in interactive gambling licensed in the Republic, will apply.
Other control measures include the requirement that service providers may not convert any funds in a player account into any other form of value, thereby limiting opportunities for money laundering. The interactive gambling service provider has an obligation to report suspicious and illegal activities. The provision for control systems will be prescribed in the regulations to ensure compliance.
With regard to enforcement and compliance and given the borderless nature of interactive gambling, it is our view that the enforcement and the administration of this Bill should be at a national level. In support of that principle, the National Gambling Board is the competent institution to ensure compliance with the National Gambling Amendment Bill and conditions of license. The board will be required to supervise and enforce compliance by licensees with the Financial Intelligence Centre Act requirements.
It will be expected of the National Gambling Board to conduct inspections in respect of interactive gambling websites and premises where equipment and software are located. The National Gambling Board may revoke or suspend licenses for noncompliance, and as part of corporate governance may delegate some of its enforcement and compliance powers to the provincial licensing authorities.
As already alluded to, the Bill provides for the licensing of interactive gambling and these licenses are to be issued as national licenses due to the borderless nature of the activity. The types of licenses provided for in clause 26 of the Bill relate to operators, manufacturers, suppliers or maintenance providers of interactive gambling software and equipment.
Finally, there are a number of other important provisions. In this regard, the Bill will provide for the imposition of taxation, which will be catered for in a separate process that involves National Treasury and the Minister of Finance. It is our view that taxation will be optimised to create a level playing field, and at the same time be used to curb the proliferation of gambling.
Furthermore, it is important to note that interactive gambling will not be treated differently from land-based casinos and other forms of gambling, in terms of licensing conditions and other requirements. I must also highlight that due to the nature of this form of gambling and the advent of technology, among other reasons, a lot of detail will be provided for in the regulations.
In conclusion, let me once again thank the Select Committee on Economic and Foreign Affairs for their guidance and support in aiding us to steer the legislation in the right direction. I also wish to extend a word of gratitude to other government departments, key stakeholders in the industry, civil society, our provincial counterparts and members of the public in general for their inputs into these amendments and for their commitment to ensuring that this Bill is appropriate and effective. I commend this Bill to the Chamber. Thank you. [Applause.]