1. THE NATIONAL GAMBLING AMENDMENT BILL, 2007
Presentation to Select Committee on Economic and Foreign Affairs
21 February 2007

2. Recommended policy option support regulating IG:
Objectives
Considerable number of South Africans participate in IG with international online gambling sites
Recommended policy option support regulating IG:
Cost of prohibiting high (e.g policing)
Protection of players
Loss of revenue to the fiscus

3. Introduction
The National Gambling Act, 2004 (“the NGA”) requires the Minister to introduce into Parliament, within two years of the effective date, i.e. 1 November 2004, legislation for the regulation of interactive gambling (IG).
A research committee was established by the National Gambling Board (NGB) to investigate the implications of the regulation of IG within the Republic.
The research report was finalised in October 2005, and tabled before the National Gambling Policy Council (NGPC).

4. Introduction cont.
The NGPC resolved that the Dti prepare a draft policy framework and legislation to regulate IG.
Draft Bill was approved by Cabinet in December 2006
Bill published for comment on 18 December 2006, closing date for comments was 12 February 2007

5. The key impact areas identified by the report included:
Background
The key impact areas identified by the report included:
Competitiveness with global gambling jurisdictions;
Flow of funds;
Employment;
Protection of vulnerable persons;
Addiction to gambling;
Exposure to money laundering and organised crime;
Competition within local gambling industry;
Cost of regulation and monitoring

6. Approach
To introduce IG by way of an amendment to the NGA as opposed to a separate piece of legislation.
Policy on IG recommended that IG should form part of the broad policy for the regulation of all forms of gambling and be subjected to the general administrative and oversight role of the Board, rather than creating a separate regulatory authority for IG.
Existing regulatory regime i.t.o the NGA largely applies to all forms of gambling including IG.

7. Compliance and enforcement Problem gambling Money Laundering
Scheme of the Bill
Definitions
Provision of IG games
Player protection
Advertising
Licensing
Compliance and enforcement
Problem gambling
Money Laundering
Empowerment

8. Insertion of a number of new definitions relating to IG including:
- IG equipment and software;
- registered player;
- nominated account;
- player account;
- ensure consistency with definitions in the
Electronic Communications and Transactions Act (ECTA).

9. Provides for authorised IG games, systems and methods
Provision of IG games
Establishes a lawful basis for provision, regulation and control of IG within the Republic
Provides for authorised forms of electronic communication for purposes of IG
Provides for authorised IG games, systems and methods

10. Registration of players Establishment of player account for payment
Player protection
Registration of players
Establishment of player account for payment
of monies
Payment of wagers and prizes to players
Remittance to foreign players and external
companies
Dispute resolution

11. Advertising
Existing provisions i.r.o advertising in NGA
apply to IG, e.g. advertisement to carry notice of dangers of addictive and compulsive gambling
Only licensed IG providers are permitted to
advertise IG
The Minister to prescribe the content which
may be reflected on the IG website

12. - operator licences; and
Licensing
IG licences to be issued as national licences due to the borderless nature of IG
IG licences include:
- operator licences; and
- personnel licences (key employees and management
staff);
Licences for gambling devices
IG software
IG equipment
Capital maintenance regime: Maintenance of capital regime is a rule which insists that paid-up capital may be diminished or lost in the course of the company’s trading but assumes that persons who deal with, and give credit to a company, naturally rely upon the fact that the company is trading with a certain amount of capital already paid and they are entitled to assume that no part of the capital which has been paid into the coffers of the company has been subsequently paid out, except in the legitimate course of its business.
Solvency liquidity This is a rule which allows a company to make a distribution as long as it can satisfy the two requirements that
The company’s assets are equal to or exceed its liabilities (Solvency); and
The company is able to pay its debts as they fall due in the ordinary course of business (Liquidity).

13. Compliance and enforcement
NGB is responsible to:
- ensure compliance with the NGA and conditions of
licence;
- supervise and enforce compliance by licensees with
FICA etc.
- conduct inspections i.r.o IG websites and premises
where IG equipment and software is located
NGB may revoke or suspend licences i.r.o IG for non-compliance
NGB may delegate it’s enforcement and compliance powers to the Provincial Licensing Authorities (PLAs).

14. Self-diagnosis system Notice on website of IG provider i.r.o:
Problem Gambling
Electronic system for the monitoring and reporting of registered players
Self-diagnosis system
Notice on website of IG provider i.r.o:
- voluntary player exclusion
- treatment of addictive gambling (National Responsible Gambling Programme)
Solvency and liquidity Test
A company satisfies the solvency and liquidity test at a particular time if, considering all reasonably foreseeable financial circumstances of the company at that time –
(1)          the company’s total assets equal or exceed its total liabilities; and
(2)          it appears that the company will be able to pay its debts as they became due in the course of business for a period of –
(a) 12 months after the date on which the test is considered; or
(b) in the case of a distribution, 12 months following that distribution.

15. Registration of players and verification of player identity
Money laundering
Registration of players and verification of player identity
Establishment of player account and verification of nominated accounts
Obligation on IG provider to report suspicious and illegal activities
Provision for control systems to be prescribed

16. Conditions for awarding of IG licenses subject to commitment to:
Empowerment
Conditions for awarding of IG licenses subject to commitment to:
- socio economic upliftment
- BBBEE requirements
Registration process in terms of new law
The Application must complete and lodge a Notice of Incorporation and prepare the only governing document of the company, which is a Memorandum of Incorporation. The memorandum does not have to be lodged with the Commission, unless the company is widely-held. A lot of current forms are done away with in terms of the new Bill (for example, CM5, CM2, CM 22, CM29, CM31, CM44, CM46 and CM47).

17. - provide certainty and thereby enhance;
Conclusion
Regulation of IG will:
- provide certainty and thereby enhance;
international competitiveness;
- provide revenue to the fiscus;
- ensure accountability by IG industry;
- eliminate illegal IG operations;
- protection of players; and
- provide for effective and transparent licensing.
Existing regime for name reservation and registration
Currently, a company or a CC cannot be registered and incorporated before the self standing process of name reservation has been completed (by means of CM5). In addition a whole number of other documents are required, i.e.
Memorandum and Articles (CM5 and CM44) which must be certified by Notary Public.
Notice of Registered office (CM22)
List of Directors, Officers and Auditors (CM29)
Auditor’s Consent Form (CM31)
Application for Commencement of Business (CM46)
Sufficiency of Capital Form (CM47)

18. THANK YOU