Online gambling’s social and economic impact continues to grow, amid the legal uncertainty. (Picture: Freepik)
Conflicting legal opinions are mounting over the legality of online gambling, with lawyers and the National Gambling Board (NGB) squabbling over interpretations of the law.
This lack of clarity over the legality of online gambling comes during Responsible Gambling Month.
The legal wrangling follows a recent Supreme Court of Appeal (SCA) ruling, which found that bookmakers in Gauteng can’t offer fixed-odds bets to punters on the outcomes of roulette games except when they have casino licences.
The storm was triggered by an SCA ruling that combined two related cases involving Supabets, the Casino Association of South Africa (CASA) and the Gauteng Gambling Board. Supabets is a sports betting platform that also offers casino-style games.
A dispute arose after the Gauteng Gambling Board allowed Supabets to offer bets on livestreamed roulette games. CASA complained that bookmakers were offering bets on casino games, which it said was illegal.
After the Gambling Board dismissed the complaint nearly 10 months later, CASA took the matter to the Gauteng High Court, which sided with the association and rejected Supabets’ argument that roulette is a sporting, fixed-odds, betting game.
The SCA agreed while confirming that Gauteng has the authority to regulate its own licences. Even though there is a National Gambling Act, each province has its own legislation, which determines which games can be played online.
On the back of the ruling, the NGB issued a statement saying SA does not permit interactive gambling, while the betting sector is permitted to offer fixed odds betting through online platforms.
Trade, industry and competition minister Parks Tau says in his department’s latest annual report: “Online gambling remains prohibited in South Africa, except for betting on sport and horseracing.”
Trade, industry and competition minister Parks Tau.
Garron Whitesman, founder of Whitesmans Attorneys, notes that the words ‘gambling’, ‘betting’ and ‘gaming’ are used interchangeably in the National Gambling Act as well as in the industry.
“While this judgement was premised on the interpretation of the Gauteng Gambling Act, its implications extend to all bookmakers across the country,” says the NGB, the umbrella body for the gambling industry under the auspices of the Department of Trade, Industry and Competition.
The NGB did not respond to requests for comment.
Whitesman says the NGB is simply wrong based on his interpretation of wording in the 2004 National Gambling Act. The 2004 Act does allow digital or online gambling as long as the bookmakers are licensed under South African law, he says.
Another lawyer and the Western Cape Gambling and Racing Board agree with Whitesman’s view.
In a statement, the Western Cape Gambling and Racing Board (WCGRB) says: “[The] issue of interactive and online gambling was not discussed or pronounced on by the SCA… The WCGRB hereby confirms that the Supabets judgement does not apply to the Western Cape province.”
Whitesman tells ITWeb that the decision made by the SCA relates only to Gauteng, which has laws that are narrower in their definition of what can be played online than other provinces.
Other provinces, in particular the Western Cape and Mpumalanga, have wider definitions of online gambling, enabling companies to offer a broader range of gaming options, says Whitesman.
“The SCA made it clear it is the provincial gambling authorities, not the NGB, that determine what types of bets their licensees may offer,” Whitesman says. He adds that “the Supabets ruling does not make online betting on casino-style games with South African licensed bookmakers unlawful”.
Wayne Lurie, director of Lurie Inc Attorneys and CEO of the recently created SA Responsible Online Gambling Association, concurs with Whitesman.
The case “was not a nationwide prohibition on online gambling. It was a narrow, fact-specific ruling interpreting one clause in the Gauteng Gambling Act… Nothing more, nothing less,” Lurie says.
Complicating the issue further is the fact that the Democratic Alliance has introduced a Member’s Bill – the Remote Gambling Bill – which is currently making its way through Parliament.
The Bill is currently awaiting evaluation by the Portfolio Committee on Trade, Industry and Competition. In a summary of the proposed legislation, Parliament issued a statement a year ago saying: “Interactive gambling is currently not regulated in SA.”
Online betting accounted for 61% of gross gambling revenue (the difference between the amount wagered and money won) in the 2023/24 year.
When something is “not regulated,” there is a lack of specific, tailored statutory frameworks and dedicated oversight, which means companies must work within common law, such as court cases and the Constitution.
“Over the past 13 to 14 years, the South African public has been exposed to and has participated in online and remote gambling. By not regulating this gambling activity, the erosion of the rule of law and criminal activity is being encouraged,” the legislators said.
“I do think we need tighter regulations around this space and more clarity, as it is becoming a massive problem in our country,” says Nerushka Bowan, technology and privacy lawyer.
The legal uncertainty comes as online gambling’s social and economic impact continues to grow.
According to Casey Sprake, an economist at Anchor Capital, online betting “has dethroned casinos to become the dominant form of gambling, fuelled by the rise of digital platforms, mobile accessibility and sports sponsorships that blur the lines between entertainment and wagering”.
Sprake notes that the same digital accessibility driving online gambling growth “is also amplifying social risks, particularly as a source of financial strain among vulnerable groups, such as the youth and low-income households”.
“What was once spent on entertainment, travel, or leisure is increasingly being channelled into betting platforms, both domestic and offshore.”
