Chairperson, hon Ministers and Deputy Ministers, hon members, since gambling was legalised through the National Gambling Act of 1996 and the national Lotteries Act of 1997, the gambling industry has grown significantly. Gambling and national lotteries together employ just over 59 000 workers and generate a little over R18,1 billion.
There have been challenges in the distribution of lottery funds for good causes. Firstly the distribution agencies have not been accountable to the National Lotteries Board on the adjudication and granting of funds to the applicants. Secondly, due to the ad hoc nature of the distribution agencies there have been huge backlogs in processing and approving applications. Thirdly, issues relating to conflict of interest have not been exhaustively clarified beyond simple recusal. Added to these have been the cumbersome application forms and the required audited financial statements, which advantaged well established, capacitated organisations but disadvantaged small, rural nongovernmemtal organisations and community-based organisations seeking to service vulnerable and historically disadvantaged communities.
There are also illegal lotteries that are carried out in the name of promotions and marketing competitions. We think the National Lotteries Board should be enabled to enforce legislation on these forms of illegal gambling to protect the public and ensure that the state collects taxes.
Having considered these challenges, the Portfolio Committee on Trade and Industry proposes the following: Firstly, a full-time grant-making body should be established. It should be accountable to the National Lotteries Board and its function should be to adjudicate and distribute funds to deserving organisations, to verify the existence of projects and/or services that these organisations purport to be carrying out and to ensure that these projects and services reach the intended beneficiaries and communities in a manner that brings about a better life.
Secondly, the cumbersome application forms and stringent requirements for financial statements often demanded even from new organisations should be simplified and not requested from new CBOs and NGOs. In addition, small and vulnerable organisations that do not have audited financial statements readily available should be assisted to provide monthly financial reports to ensure accountability.
A multiyear grant system should be introduced to make the funded organisations more sustainable and able to plan ahead. To prevent a repeat of the suspension of the operations of the national lotteries should there in the future again be a legal challenge in granting the licence to the operator, the Minister of Trade and Industry must be mandated to extend the licence for a reasonable period.
Gambling, the activities of which are overseen by the National Gambling Board and Provincial Gambling Regulatory Authorities is a concurrent competence. However, there have been challenges in ensuring co-operative governance, co-ordination and consultation on regulating gambling activities; licensing the operators and manufacturers of gambling machines; and in implementing uniform national norms and standards among provinces.
To address these challenges, it is recommended that there be a memorandum of understanding between the NGB and the PGRAs to regulate their relationship and ensure uniformity in implementing national and provincial legislation. In addition, there should be national norms and standards to set minimum standards for licensing conditions, limitations on forms of gambling activities and to ensure accountability and transparency in the implementation of national policy.
It has been acknowledged that the National Gambling Policy Council has not been effectively carrying out its mandate of promoting co-operative governance, co-ordination and co-ordinating national gambling policy implementation.