Another Downswing for South African Online Gambling

February 05, 2011 | News Category: Gaming Law

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South African online gambling has been in the news a fair amount in the past year. At first, it seemed as if the South African government was planning to legalize online gambling, since they already had a plan in place, it was simply a matter of formally adopting the online gambling laws after each province had approved it. However, it seems that, at least for now, is not to be.

Some months ago, a judge in the province of Gauteng ruled that online casinos were not allowed to offer their wares, and now a directive from the South African Reserve Banks has been handed down to the regular banks, instructing them not to process online casino financial transactions.

The directive came from the Financial Surveillance Department at the Reserve Bank of South Africa. An excerpt from the letter that was sent out read as follows: "Residents may not participate in lotteries organized abroad or participate in any online gambling activities, as such participation contravenes the Lotteries Act 57/1997 and the National Gambling Act 7/2004 as amended by the National Gambling Amendment Act 10/2008."

The banks are expected to "police" the transactions, and prevent players from making any kind of online gambling transactions, whether it be done by credit card, debit card, or any type of bank transfer. The banks have even been instructed that they may not change money into foreign currency if the money is going to be used to buy overseas lottery tickets. The responsibility of not partaking in online gambling seems to be more on the banks than on the individual.

The banks were informed that "Residents may not use their credit or debit cards in the Republic to facilitate payments for the purchase of foreign lottery tickets and online gambling. Accordingly, authorized dealers must decline requests to purchase foreign exchange for such purposes in all instances."

The letter continued as follows: "In addition, all issuers of American Express, Diners Club, Mastercard and Visa cards, may not accept debits against SA resident cardholder's accounts in respect of the payment for the purchase of foreign lottery tickets or online gambling activities."

In the meantime, while the South African government has been unable to make a decision regarding online gambling, the country is losing large amounts of potential revenue in the forms of online gambling taxation, and online gambling regulations.

This latest development shows that South Africa is most likely working towards banning online gambling in the long term, and is not seem like a move that is being put in place to ease the country towards regulated online gambling.