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South Africa goes down Online Gambling Regulation Road

15 April, 2009,  Milton Shaw, Staff writer

These days it seems countries around the world are lining up to announce impending laws governing online gambling.  The latest is South Africa who have for some time grappled with how to deal with internet casinos and poker rooms.

South Africa are wanting to go down the regulatory road, offering licenses to operators hosting their product on South African based servers and offering their product to local residents in an effort to stamp out patronage of offshore operators.  One particular operator that the South African Government and National Gambling Board (NGB) are eager to undermine is popular poker room Silversands which has managed to thrive in the as yet unregulated environment much to the ire of authorities.  To date they have aggressively advertised on South African print and television media in the absence of any laws to the contrary to acquire a large customer base.

Thebi Moja, acting CEO of the NGB openly admits that they are targeting Silversands with the new law.  “They know very well that they operating illegally and we have for a number of years attempted to put a stop to their activities,” he says . “If we are able to prevent them from operating in SA that would be a big victory.”

The proposed regulatory framework is complicated and ambitious to say the least.  Local operators will be granted licenses and will then only be able to accept deposits from players from specially nominated bank accounts (with South African banks) set up solely for the purpose of online gambling.  Players are able to deposit money by credit card or wire transfer from their gambling account only.

Authorities concede the proposed approach is not perfect but believe it will bring a degree of control to an industry that has until now been described as shambolic. 

I suspect this may be another case of a head in the sand legislative approach that will have little impact on the status quo.  The South Africans should have a talk to the Australian government which passed similar (although less onerous for players) laws 8 years ago and which have had little impact on players choosing to gamble with offshore operators.

Imagine being a South African wanting to bet online faced to 2 options:

1.Drive to the bank and go through the nuisance/administrative hassle and delays of setting up a new bank account.  Drive home and wait for the account to become active then choose from the 10 to 15 local operators to play at, some of whom will still have limited players and table options to play; or

2. Choose from the 2000 odd offshore operators some of whom currently service hundreds of thousands of happy customers, instantly deposit and start playing without getting off the couch.

I know which option I'd choose.  But good luck NGB and South African Government.

Never a dull moment in the online gambling world.



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