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Don't bet on gambling ban

By Percy Zvomuya
December 11, 2006

A case in which online casino operators challenged a ban on internet gambling was thrown out of court last week. But experts question whether the judgement of the Pretoria High Court is enforceable.

It has also emerged that the National Gambling Board (NGB), one of the defendants, has submitted a report to the minister of trade and industry recommending the legalisation and taxation of internet gambling.

The case was brought before the courts by Casino Enterprises, which owns and operates Piggs Peak in Swaziland, where both hold internet and land-based casino licences issued by the Swazi government.

They argued that although the gambling is done on computers in Gauteng, it actually takes place in Swaziland. But the NGB, the Gauteng Gambling Board and Minister of Trade and Industry Mandisi Mpahlwa, who opposed, brought in an expert who countered that “the gambling takes place in at least both Gauteng and Swaziland”.

The court ruled in favour of the NGB and said that anyone who facilitates online gambling -- including internet service providers (ISPs), banks and media outlets that carry adverts -- is liable to a fine of up to R10million or imprisonment of up to 10 years.

The Internet Service Providers Association (Ispa) countered, saying that “as far as Ispa is aware, there are no ISPs, either in South Africa or globally, that facilitate the provision of online gambling”. The semantic quibbling continued when Ispa pointed out that what they and other ISPs worldwide do is merely “facilitate internet connectivity for both applications providers and users”.

The association also said “there is no law that requires ISPs to block or otherwise restrict access to online gambling” and that the Electronic Communications and Transactions Act says “there is no general obligation on an ISP when providing internet access, hosting and other related services to monitor the data which it transmits … or circumstances indicating an unlawful activity”.

They argued that, although the Act creates the possibility of a complainant, for instance a government agency, compelling an ISP to remove unlawful content, the minister of communications “has yet to recognise any industry representative bodies” -- one of the requirements of the Act -- four years after it was passed. “As such and until a court judgement or law states otherwise, there will not be any significant effect on ISPs,” said the association.

Nedbank said it cannot “monitor online banking transactions to the extent that ‘online gambling’ can be categorised”.

Nick Jacobs, general manager of Group Risk Services, explained that in most cases gamblers “use credit cards or other forms of electronic payment, other than direct cash transfers, and it becomes even more difficult to home in on an online gambling account”. He recommended that, “given the recent ruling by the high court that online gambling is considered unlawful, Nedbank advise employees and clients alike to refrain from this activity”.

Some analysts have expressed reservations about the ability of the South African Police Service to deal with this, but Jacques Booysen of the Gauteng Gambling Board said “there are skilled and resourced personnel within the South African law enforcement agencies”. Should this not be sufficient, “the services will be sourced from the private sector”.

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