Online Gambling Illegal in South Africa - Confirmed

February 19, 2011 | News Category: Gaming Law

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The question as to whether online gambling in South Africa is illegal or not has once again come to the fore. Unfortunately for South African online gamblers and for the South African online gambling operations, it seems that at this time online gambling is illegal in South Africa until further notice, which may or may not come.

This week, the Department of Trade and Industry in South Africa has confirmed that online gambling in South Africa is currently illegal, although it was noted that the law that is still in its draft format, when it is enacted, would make the industry legal, under the regulations that were proposed in 2008.

The issue came up again in the news because there have been some questions as to whether the popular online South African penny-auction sites fall under online gambling or not.

A representative from the Department of Trade and Industry (DTI) explained: "Penny auction sites make their money not on the price a 'winner' pays for an item advertised; they make the vast majority of their cash from the fact that every bid placed costs the individual placing it a far larger sum of money than just the single penny added to the final price of the item."

Although this may not sound like online gambling to the layman, the DTI has noted that non-refundable fees may not be charged when people want to take part in an auction. The DTI representative said: "Having considered the way these auctions are conducted it is now clear that this is similar to gambling and can be regulated under gambling regulations."

After the Gauteng ruling regarding online gambling was issued, the National Gambling Board, which wants to protect land based gambling, came up with the following comment: "Unlicensed interactive gambling activities significantly undermine national policy, legislation and threaten licensed gambling operations by creating an unregulated and untaxed competition."

The National Gambling Board (NGB) has noted that online betting is still legal in South Africa, but that interactive betting is not. However, the Department of Trade and Industry does not seem to share the same view as the NGB.

The Department of Trade and Industry clearly stated that "any form of online/interactive gambling is illegal in South Africa until the National Gambling Amendment Act of 2008 comes into effect."

This has left many feeling somewhat confused, and the industry can only hope that the gambling act is made effective soon, however, it does not look as if this will happen for quite some time, since the act is having a very slow journey through the South African political system.