Thursday, November 30, 2006

A South African judge gave online gambling optimists pause for thought this
week in a judgement that unlicensed gambling in the country was illegal.
Online gamblers in South Africa could be fined up to Rands 10 million (GBP
735 000) or jailed for up to 10 years in terms of current legislation, which
will hopefully be reversed if the government decides to follow
recommendations to legalise the pastime following extensive research. But
this week the ruling in the Pretoria High Court was against online gambling.
Judge Willie Hartzenberg dismissed an application by Casino Enterprises of
Swaziland to allow residents of the populous Gauteng province to gamble
online. The casino had taken the Gauteng and the National Gambling Board, as
well as the SA Minister of Trade and Industry, to court. The basis for the
application was that although the wagering was done on personal computers in
Gauteng, the gambling was in reality taking place in Swaziland. The casino
stressed that because of this, the punters were not contravening the Gauteng
Gambling Act. However, the application was strenuously opposed by the
defendants, who argued that Casino Enterprises was not licensed to operate
gambling activities in South Africa. In his ruling, Judge Hartzenberg noted:
"In terms of section 15(1) of the National Act, nobody is allowed to
advertise or promote any gambling activity in the Republic which is unlawful
in terms of that act or applicable provincial law, and in terms of section
71(1) of the Gauteng act, nobody is allowed to advertise or disseminate any
information relating to gambling in Gauteng in respect of which no license
was issued." When parliament passed the gambling laws, it took a number of
issues into consideration, including the fact that it had to guard against
people gambling irresponsibly and becoming addicted. "It was recognised that
gambling can be dangerous for individuals and that they have to be protected
by way of controls," stated the judge, adding: "It was recognised that
gambling can be a great source of revenue for the province, which, if wisely
spent, can improve the standard of living." To ensure that the government
achieved the goal of generating more revenue for its coffers, it had to
institute proper controls.

"One thinks of licensing of casinos and of a levy on turnover.

"All monies spent on casino gambling must contribute to the coffers of the
state or the province," said Judge Hartzenberg.

The only way that the government could ensure that it maintained proper
controls of casino gambling was if only licensed casinos were permitted to
operate, he added.

In dismissing the plaintiff's application, Judge Hartzenberg said: "It is
difficult to see why the Swaziland legislation, in terms of which the
plaintiff obtained its casino license, can have extra-territorial operation.

"In other words, why actions of the plaintiff within the borders of the
Republic are sanctioned by the Swaziland license."

In a statement, the Gauteng Gambling Board hailed the court's decision as a
groundbreaking one and maintained that online gambling was unlawful.

The board warned punters, organisations, banks and Internet providers which
advertise or facilitate online gambling that they would be prosecuted. It
said this would be enforced by monitoring Internet gambling.