Picture: THINKSTOCK
Picture: THINKSTOCK

THE Department of Trade and Industry is proposing that all forms of online gambling and other new forms of gambling, such as dog racing, be prohibited.

The proposal is currently under discussion at the National Gambling Policy Council which brings together national and provincial government representatives to discuss policy.

The department is also proposing that the number of electronic bingo terminals allowed nationally be restricted. Once the policy council has finalised the draft policy it will be submitted to the Cabinet for approval and it will then be released for public comment.

The department’s deputy director-general Zodwa Ntuli and chief director MacDonald Netshitenzhe told MPs on Tuesday that the proposal to ban online gambling was based on the view that the government had the capability to enforce regulations of the industry. It also wanted to limit gambling to the traditional forms currently in existence.

The benefit of online gambling in terms of job creation was not quantifiable, Mr Netshitenzhe told members of Parliament’s trade and industry portfolio committee. He pointed out that several jurisdictions around the world had outlawed it.

The Democratic Alliance voiced strong opposition to an outright ban on online gambling, arguing in favour of regulation instead.

"That is a very, very bad decision," DA spokesman on trade and industry Geordin Hill-Lewis said. "I fiercely disagree with that view. It is completely shortsighted to say that it is better for South Africans not to be allowed to gamble online when there is patently significant demand in the country to do that. It is for government to facilitate that in the safest way possible."

He said banning was not a wise move, arguing that it would involve the expenditure of huge resources on enforcement.

Ms Ntuli said the department’s policy decision recognised the fact that SA had a higher level of problem gambling and indebtedness than many other countries.

It also wanted to see more stringent controls introduced over ease of access to gambling activities which should not be allowed to take place in shopping malls. A framework to regulate horse racing was also proposed. This would include the requirement to implement transformation in the industry which would be tied to the issuing of licences.

Ms Ntuli conceded that there were conflicting objectives between national and provincial government with regard to gambling, which is a concurrent competence.

Provinces have the competence to issue licences and rely on gambling as a source of revenue, whereas national government is responsible for formulating the national policy framework.

Provinces have allowed electronic bingo terminals to operate even though there was no national policy for them, which prompted Trade and Industry Minister Rob Davies to impose a moratorium on the issuing of further licences.

Mr Netshitenzhe also briefed the committee on the draft regulations, under the National Credit Act, which are due for implementation in the next few months. There had been requests for their introduction to be delayed, he said, so that credit providers could get their systems in place, but doing so would put consumers at risk.

Reckless lending had been accelerating ahead of the coming into force of the regulations which require that affordability assessments be undertaken before loans are granted. The application for a delay would be considered "very cautiously" he said.

Ms Ntuli also pointed out that the amendments to the National Credit Act were passed in December last year so the industry had had plenty of time to get ready for the changes.

Also, until the act and the regulations take effect, the National Consumer Tribunal will not be able to hear cases of reckless lending which will have to continue to queue up in the courts, delaying redress for consumers. She said a report by the National Credit Regulator on a proposed maximum interest rate for loans was due to be submitted to the minister by November 19. There would be extensive consultations with industry on the proposals.