Dept of trade and industry-gambling review

Roulette Machines,crack cocaine of gambling

Bookies in the UK are full of slot machines and virtual racing sad

Plus help yourself machines, yes a type of ATM is planned but I see that a negative for job creation in SA

thanks Hibs for the link: a chunk to read but of interest immediately: (have not read the entire paper so will probably post more paras later)

see executive summary what they say on pg 11:

Betting
Horseracing is a well-established and reasonably well-managed industry in South
Africa. Although it is clearly facing major challenges, it appears set to ride out the
economic downturn as well as declining on-course and off-course betting on
horseracing. Horseracing is a major employer in South Africa, and for this reason
alone, it is hoped that the industry prospers. In order to survive, the horseracing
industry has to modernise itself and become more attractive to new, especially
younger, punters. This requires a combination of two things: modernising existing
venues and race formats, and developing new business models more closely
integrated with other forms of gambling. Both of these changes are in line with world
trends.

Managed rollout of licenced gambling activities page 18:

Betting
The horseracing sector is a declining sector, which is struggling to modernize and
transform itself. The current ownership and funding arrangements do not provide
sufficient impetus for modernization. Furthermore, the sector seems constrained in
its ability to make commercial decisions by its licensing conditions. The Commission
therefore offers the following recommendations:
1. Market forces should be allowed to dictate the number and location of
tracks, as well as the number of races. Consideration should be given to
separating the ownership of the tracks and the tote. The tracks could be
funded through a combination of a levy on the gambling tote, bookmakers
and online betting operators, as well as commercial rights, such as
broadcasting rights for races.
2. The current funding models for the industry should be reviewed to ensure
that the tax rates and levies paid to the industry are standardised across the
board to create a level field.
3. The horseracing industry should be enabled to integrate its operations with
other forms of gaming, especially slots.
4. Current proposals that the former Jockey Club, now known as the
Horseracing Authority, should become a statutory regulator should be
considered. What is required is a more complete review of the horseracing
sector, particularly the integration of the ownership of the tracks and the 19
tote, as well as the competitive challenges of the future, and an appropriate
industry and regulatory structure should be researched and developed.

New forms of gambling pg20:

New forms of gambling
Several unlicensed and therefore by definition illegal forms of gambling are evident in
South Africa. These include technological advancements on existing forms of
gambling, as well as forms of gambling that have been in existence for a while and
remain unregulated. The range of unlicensed gambling activities extends from
fahfee, cards and dice; bush racing; greyhound racing, interactive gambling, to
betting exchanges and certain forms of poker. For the most part, very little is known
about the size and impact of these gambling activities. As part of its mandate, the
Commission considered each of these forms of gambling in terms of set criteria for
assessment and also took into consideration international best practice before
making a recommendation. The criteria considered include:21
1. Demand
2. Proliferation
3. Punter protection
4. Geographical location
5. Economic viability
6. Economic impact
7. Competition
8. Enforcement
9. Revenue
10. Animal welfare (where relevant)
Greyhound racing
The Commission carefully evaluated the evidence regarding greyhound racing. A
majority view and a minority view on the legalisation of the industry were formed. The
majority view is that greyhound racing should not be legalised in South Africa. This
view was formed on the basis of the following considerations:
1. There is significant popular opposition to greyhound racing and legitimate
concerns about animal welfare.
2. The industry is unlikely to generate significant revenues.
3. In order to become successful, greyhound racing would have to stimulate
demand for a new gambling product, which is at odds with the philosophy
behind the controlled rollout of gambling in South Africa, and is likely to lead
to a proliferation of gambling.
The minority view is that more research will need to be conducted, specifically with
respect to the over breeding and retirement of racing animals, before a decision can
be made with regard to the possible legalisation of greyhound racing in South Africa.
Should a decision be made to legalise dog racing, the Commission recommends that
the following points should be kept in mind in creating a regulatory regime:
1. A breeding programme needs to be properly monitored from the outset.
2. A robust licensing system needs to be put into place to ensure that the
persons involved are fit and proper people. This is especially important, as
racing is predominantly a cash economy, which can attract unsavoury
elements.
3. A proper rulebook needs to be developed, and accepted by all parties. This
can be adapted from other jurisdictions.
4. An effective drug control/management framework needs to be put into place.
This is important from both an animal welfare and gambling integrity
perspective. People will only bet on the industry if it is fair.
5. A strong policy framework for animal welfare across the entire lifecycle of the
dog needs to be developed and put into place. The framework developed in
other jurisdictions, as well as the “duty of care” imposed by the Animal
Welfare Act in the UK, should be considered here.22
Fahfee
The Commission did not have the time or opportunity to conduct independent
research into this inherently illegal component of the gambling sector. On the basis of
information supplied by PGRAs and the limited extant studies on fahfee, the
Commission raised concerns about the following:
1. Fahfee is an entirely cash-based business that does not pay tax.
2. Significant concerns have been raised about the involvement of fahfee
operators in other illicit activities, including rhino and abalone poaching,
trading counterfeit goods, and cash-in-transit robberies.
3. Fahfee is particularly appealing to underage gamblers and elder women, and
is a high-risk game in terms of its propensity to encourage problem gambling.
Given the significance of various forms of unlicensed and hence illegal gambling in
South Africa, particularly games like fahfee (and dice) that target young people and
the poor, the commission is of the view that additional research needs to be carried
so that appropriate policies regarding these gambling activities can be developed.
Bush racing
Bush racing are informal horse races, which usually take place in rural area, making
policing and prohibition difficult. Given the nature of the activity, it seems unlikely to
see substantial growth and therefore contribute to proliferation or cannibalization of
legal activities. In order to create some regulatory framework for this type of activity,
the Commission recommends that consideration be given to establishing a system of
occasional licences or notices, issued by or to the local authorities, as is the case in
Great Britain. In Great Britain, informal racing activity is allowed for a maximum of
eight ( times per year per venue. These races would have to be properly
supervised by the appropriate animal welfare authorities.

Betting exchanges - Online betting pg 23:

g>Virtual racing
The Commission considered virtual racing and concluded that it an interactive
gambling game. It is therefore recommended that this game should be regulated
accordingly.
Online gambling
While there are still a number of international jurisdictions that prohibit interactive
gambling (many of those jurisdictions already allow online betting), the trend is to
move towards regulation and licensing. The challenge in this sector is to provide
sufficient incentives for operators to become licensed, as the borderless nature of
their activity allows them to escape regulation fairly easily. One such incentive is the
ability of licensed operators to advertise their services legally.
During the international visits, regulators and operators impressed on the
Commission the need to regulate online or remote gambling holistically. At issue are
the opportunities that the distribution mechanism, namely the Internet, telephone and
cell-phone technology, offer for exploitation and for proliferation. The current
distinction in South African law between interactive gambling and other forms of
online gambling, such as bookmaking, the tote and the lottery, which offer their
services online as well, is artificial and does not provide punters with uniform
protection.
The Commission is therefore of the view that a holistic view of online gambling
should be taken to its regulation that includes interactive gambling and all forms of
remote gambling, such as telephone or cell phone gambling. The online gambling
regulation should also provide for intermediaries, such as betting exchanges and
include online betting through bookmakers and the totalisator via the Internet. The
National Gambling Act would have to be amended to reflect this approach to include
all forms of remote gambling rather than limiting this to games played against the
“house” as is currently the situation.
It is proposed that a maximum number of licences should be determined for online
gambling to allow for the controlled rollout of online gambling and to monitor its
socio-economic impact over time. Too little is known at this stage about its impact on
problem gambling to be able to allow a free market. In addition, the approach to limit
the number of land-based gambling opportunities can be substantially undermined, if
online gambling is not strictly controlled and limited. Restrictions on the number of
operators and the number of games should be considered. Care should, however, be
taken not to make the number of licences too few or restricted, as the intention of a
licensing regime would be to attract operators, not to exclude them.
The Commission further recommends that current requirements that a server must
be hosted in South Africa should be reviewed and that consideration should be given
to adopting mandatory self-limitations by players, restrictions should be imposed in
the ability to change those limits and strict requirements regarding identity checks
should be introduced.
Finally, the Commission recommends that a single regulator be responsible for the
regulation of online gambling in South Africa and that consideration should be given
to combining that online regulator with the function to regulate the national lottery and
sports pools. This recommendation is based on the synergies between the regulation
of lotteries and sports pools with online gambling and betting in particular.

Then, the overview in detail on pg 64: some snippets but forum readers should read the whole of the research findings for Betting from pg64.

It should be noted that the bookmakers do not accept bets on horseracing alone, yet
3% of the tax paid by bookmakers goes to the holders of the totalisator licence and is
not shared by any of the other sports on which bookmakers accept bets. This is
unequitable. If the principle is that the associated betting industry should help sustain
the underlying sport, then this should apply equally to all such sports.

2.6.6 Conclusion
Horseracing is a well-established industry in South Africa. Although it is clearly facing
major challenges, it appears set to ride out the economic downturn as well as
declining on-course and off-course betting on horseracing.
It is not clear why horseracing is unable to sustain itself like any other sporting
activity. The Commission is of the view that this matter warrants further review.
Horseracing is a major employer in South Africa, and for this reason alone, it is
hoped that the industry prospers.
In order to survive, the horseracing industry has to modernise itself and become
more attractive to new, especially younger, punters. This requires a combination of
two things: modernising existing venues and race formats, and developing new
business models more closely integrated with other forms of gambling. Both of these
changes are in line with world trends.
The industry needs to embrace online technologies. The debate on this is discussed
more fully in chapters 3 and 5.

we skip to chapter 3, page 76:

The participation in the different gambling modes indicates the following:
a)Coloureds showed the lowest propensity to gamble on the lotto (17.1%),
while Africans were the most active participants (31.7%).
b)Casino gambling is the most popular among Whites (11.5%) and Asians
(8.5%) and the least popular among Africans (5.6%) and Coloureds (3.7%).
Among other things, these figures indicate the relative affluence of players.
c)Africans (1.3%) and Asians (1.3%) were the most active at horse betting,
while Africans (2.1%) and Coloureds (1.0%) were fairly active sports betting
participants.
d)Scratch cards were the most popular among Africans (7.8%) and Asians
(5.3%) while this mode attracted only (1.3%) of the White population.
e)Fahfee and dice were played predominantly by Africans (3.3%) and
Coloureds (1.6%) while it was totally absent among Asians and Whites. This
reflects historic class as well as residential patterns.
The data shows that Africans and Coloureds, representing the highest percentage of
low-income people, are primarily affected by the lottery, scratch cards, horse racing,
fahfee, dice and gaming competitions (usually illegal lotteries). Thus, illegal forms of
gambling, as well as low cost gambling forms are most prevalent among poorer
population groups. Overall, however, the three most popular forms of gambling are
casino gambling, the lotto and scratch cards, irrespective of race.

[interesting read there on the outcome of the socio-economic research stats on problem gambling]

now at chapter 5 - rollout control: pg 137

5.3.5 Betting
As indicated in Chapter 2, the horseracing sector is a declining sector, which is
struggling to modernize and transform itself. The current ownership and funding
arrangements do not provide sufficient impetus for modernization. Furthermore, the
sector seems constrained in its ability to make commercial decisions by its licensing
conditions. The Commission therefore offers the following recommendations:
1. The horseracing industry currently has too many tracks, many of which are
not economically viable. It is recommended that market forces should be
allowed to dictate the number and location of tracks, as well as the number of 138
races. Consideration should be given to separating the ownership of the
tracks and the tote. The tracks could be funded through a combination of a
levy on the gambling tote, bookmakers and online betting operators, as well
as commercial rights, such as broadcasting rights for races.
2. The current funding models for the industry should be reviewed to ensure that
the tax rates and levies paid to the industry are standardised across the
board to create a level field. This review will need to consider the substantial
variation between contributions of different betting formats, as well as the
competition faced by traditional bookmakers from lower cost virtual operators.
3. The horseracing industry should be enabled to integrate its operations with
other forms of gaming, especially slots. This is a worldwide trend, and
increasingly tracks depend on their ability to offer slot machines to punters.
This ties in with the recommendation above about creating a third category of
licence specifically for stand-alone gambling venues.
4. Current proposals that the former Jockey Club, now known as the
Horseracing Authority, should become a statutory regulator should be
considered. What is required is a more complete review of the horseracing
sector, particularly the integration of the ownership of the tracks and the tote,
as well as the competitive challenges of the future, and an appropriate
industry and regulatory structure should be researched and developed.

see pg 166 - Betting Exchanges:

6.8.8 Recommendation
As with other forms of online gambling, there is existing demand for betting
exchanges. It is a technological innovation in online betting that is currently growing
in popularity internationally and is likely to grow in South Africa as more punters shift
to online betting and gambling.
.
The Commission recommends bringing these activities into the regulatory framework
explicitly. At present, there is no transparency in the regulatory framework. The
criteria of provinces that are licensing operators of similar activities are not clear,
there are no standards and it opens the door for proliferation if regulatory standards
and limits are not clearly set out upfront.
Bringing these activities into the regulatory net and providing punters with a (limited)
choice of licensed operators is likely to provide an outlet for existing demand, will
discourage punters from seeking out unlicensed sites, will maximise punter
protection and generate some tax revenues from these activities.
Betting exchanges are unlikely to stimulate much new demand, as they likely to
appeal to existing clients of either betting or online gambling operators. Much of the
opposition to betting exchanges appears to be derived from concerns by existing
operators that their markets will be put under pressure from competition by betting
exchanges. The Commission is of the view that the fact that betting exchanges would
present competition to existing forms of gambling is not a good reason to oppose
their introduction. The Commission has taken cognisance of the arguments raised by
the horseracing industry in other jurisdictions that the lower contributions by betting
exchanges to levies supporting the industry has a negative impact on the survival of
the industry. The industry must, however, accept that the innovation exists and that
they will need to find new ways to ensure their sustainability.
On the assumption that betting exchanges are unlikely to stimulate much new
demand, the Commission is not greatly concerned that it will result in proliferation,
provided that betting exchanges are regulated in the context of online gambling. It is
recommended that the online regulation makes clear provision for such
intermediaries and sets out the requirements for betting exchanges. The policy
document developed in the United Kingdom, referred to above, could provide
guidance to policymakers and legislators. The particular recommendations of interest
in the policy paper issued by the UK Department of Culture Media and Sport (DCMS)
in April 2003 are outlined below:
1. Betting exchanges would not be able to initiate bets in any way on the
exchange - in that they merely construct a controlled market; and are not a
party to the bet.
2. They may not permit their customers to identify themselves to each other,
either through personal contact or otherwise.
3. They must display and disseminate their betting rules.
4. They must consent to having their play and payment systems checked by
someone authorized by the regulator.
5. They must at all times separate money belonging to punters and their own
operating resources. 174
It is recommended that these requirements be considered for inclusion in the
legislative framework.

then, pg174 about Virtual Racing:

6.9.2 Analysis and conclusion
The Commission compared virtual horse racing to a real horse race and found that in
a real horse race, the outcome of the race is not determined by a random number
generator but by the ability of the animal, its trainer and its jockey. A virtual horse
race is in the Commission’s opinion apart from using the graphic representation of
horses could use any other characterisation, a dog or a pigeon, for example. This
does not make the activity dog or pigeon racing. Thus, the Commission does not
deem this to be a technological advancement on horse racing but rather an
interactive gambling game. This activity would be captured as such by the legislation
dealing with interactive gambling discussed below. Thus if the holders of a totalisator
licence wished to offer this form of racing, an interactive gambling licence would be
necessary. It should be however be noted that if this form gaming is offered via a
gaming machine, either in a casino or on a licensed LPM, this would not require an
interactive gambling licence as it would be covered by the legislation relating to
gaming machines. The relevant approvals for these games would have to be derived
from the relevant regulatory framework for interactive gambling or for gambling
machines.

pg174 on online gambling/interactive gambling:

6.10.5 Analysis and conclusion
The regulation of gambling via the Internet has posed a challenge to regulators and
policymakers across the world. However, governments in most international
jurisdictions recognize that gambling online is an existing and future mode of
gambling that is here to stay. Some jurisdictions such as Australia and the USA have
decided to prohibit online gambling by its citizens. However it is widely recognized
that the borderless nature of the Internet makes effective prohibition difficult to
achieve. In determining its recommendation in relation to interactive gambling the
Commission applied and tested this form of gambling against its criteria below:
6.10.5.1 Demand
There is an existing demand for gambling the various forms of gambling offered over
the internet, which includes, online poker, online casino games, online betting and
wagering by using the online websites of land-based licensed bookmakers and 181
totalisators as well as via the medium of a online betting exchange. The exact extent
of the demand has not been accurately established. However, eGaming Review
Magazine reported that in 2009, an estimated total gross win of approximately
R320m was generated online (onshore and offshore) in South Africa. It further
reported that 3% of homes in South Africa have broadband connections and 5% of
mobile phones provide EDGE/3G Internet access, an important development in the
growth of online gaming.
It is not clear whether this is an entirely new market or not. It is more likely to attract
the existing part of society that has already had an exposure to some form of landbased gambling. In particular online poker for instance is seen as a game of skill and
therefore attracts more sophisticated punters. Similarly, betting exchanges such as
Betfair generally attract punters who are sports enthusiasts and are able to
understand how to navigate these sites. Interactive gambling requires access and
use of either a computer or an Internet enabled mobile phone. Thus this form of
gambling is unlikely to impact or target the poor on a large scale.
6.10.5.2 Proliferation
At the moment bookmakers and totalisators are able to offer betting and wagering via
mobile phones. Punters can also access international sites with ease. If not properly
monitored, regulated and controlled, this could result in proliferation. Thus, it would
appear that in the case of online betting and interactive gambling, a regulatory
regime will be necessary to prevent limit proliferation.
6.10.5.3 Protection
Interactive gambling is already catered for in the existing legal framework however to
ensure uniform and more effective protection it would be appropriate and necessary
to expand the ambit of the existing legislation to cover all forms of internet gambling
under the umbrella of one piece of legislation. Thus the existing legislation would
need to be amended to include intermediaries, such as sites offering online poker
and betting exchanges, as well as online betting and wagering offered by
bookmakers and totalisators.
Thus any player using the internet or mobile phone to gamble should be subjected to
the same requirements for the registration, opening of player accounts and similarly
there should be uniform protection of minors and other vulnerable persons such as
excluded persons or those who wish to self exclude. The best way to achieve such
protection is by proper effective and uniform regulation of this industry.
The international regulators of online gambling, visited by the Commission, have
confirmed industry claims that measures relating to minors and self-exclusion can be
more easily implemented and monitored in online gambling than in land-based
activities, as the exclusions are systems based and identity of punters is checked by
various means in contrast to almost all land-based gambling activities. Gamcare, a
civil society organization, also supported this view.
6.10.5.4 Geographical location
This is an activity, which can be accessed anywhere where there is an online
connection.
6.10.5.5 Economic viability
This sector is economically viable. However, in order to ensure that credible
operators apply to be licensed in our jurisdiction, the level of taxation would need to
be carefully considered. Internet gambling is already available in the various forms 182
explained above and while the existing industry might lose some market share to this
form of gambling, the terrestrial forms of gambling will for a long time still be more
easily accessible to the majority of South Africans, to whom a visit to the casino or a
horse race is not just a form of gambling but destination where one can enjoy various
other forms of entertainment as well.
6.10.5.6 Economic impact
License holders of online gambling sometimes do have a preference in terms of
where they would wish their server to be located and this can be different from where
their head office or operating company is located. However regardless of where the
server is located, the online company still requires a license to operate in specific
markets and for which license fees, taxes and various other levies are payable.
Although it is not expected that online gambling would contribute significantly to
employment creation, there is the possibility that operators may locate their call
centre in South Africa.
6.10.5.7 Competition
Online gambling is driven by innovation and cutting edge technology and thus is
likely to stimulate modernization and innovation in the gambling industry and allow
for new entrants into the gambling sector.
6.10.5.8 Enforcement
Regulation of this activity will ensure that licensed operators can be held accountable
to South African gambling regulators and that their operations and activities can be
monitored and compliance checked.
6.10.5.9 Revenue
Due to the ability of online operators to base themselves in low tax jurisdictions and
to attract punters from those locations, online gambling operations tend to be taxed
at lower rates than normal land-based activities. However, unless the activities are
licensed, countries are unlikely to receive any revenue benefits from the sector.
6.10.6 Recommendations
The Commission is cognizant of the concerns expressed by Parliament regarding
underage and compulsive gambling, the risks of fraud and money laundering and the
need for proper protection and carefully evaluated the possibility of a continued
prohibition against the benefits of legalisation.
In a world driven by technology, online gambling is unlikely to disappear.
Internationally, jurisdictions that prohibit interactive gambling often appear to have
different forms of online gambling available, which are linked with land-based
gambling activities. In addition, it is very resource intensive to enforce prohibitions in
such an easily expanded area of gambling. Unlike land-based activities, online
gambling operations can be relaunched within minutes.
As a result, jurisdictions such as the USA and Australia, which have chosen to
prohibit online gambling, have already begun reviewing this stance. Our own
experience has shown that prohibition does not extinguish demand, but simply
creates the platform for illegal operators to thrive and establish themselves and their
brands. On the other hand, however, uncontrolled legalisation also has the potential
for stimulating latent demand on a large scale. 183
During the international visits, regulators and operators impressed on the
Commission the need to regulate online or remote gambling holistically. At issue are
the opportunities that the distribution mechanism, namely the Internet, telephone and
cell-phone technology, offer for exploitation and for proliferation. The current
distinction in South African law between interactive gambling and other forms of
online gambling, such as bookmaking, the tote and the lottery, which offer their
services online as well, is artificial and does not provide punters with uniform
protection. The same testing, verification and probity that would occur for any other
online gambling activity, needs to be conducted here as well.
The Commission is therefore of the view that a holistic view of online gambling
should be taken to its regulation that includes interactive gambling and all forms of
remote gambling, such as telephone or cell phone gambling. The online gambling
regulation should also provide for intermediaries, such as betting exchanges and
include online betting through bookmakers and the totalisator via the Internet. The
National Gambling Act would have to be amended to reflect this approach to include
all forms of remote gambling rather than limiting this to games played against the
“house” as is currently the situation.
It is proposed that a maximum number of licences should be determined for online
gambling to allow for the controlled rollout of online gambling and to monitor its
socio-economic impact over time. Too little is known at this stage about its impact on
problem gambling to be able to allow a free market for online gambling. In addition,
the approach to limit the number of land-based gambling opportunities can be
substantially undermined, if online gambling is not strictly controlled and limited.
Restrictions on the number of operators and the number of games should be
considered.
Care should, however, be taken not to make the number of licences too few or
restricted, as the intention of a licensing regime would be to attract operators, not to
exclude them. The current regulations proposed 10 licences for interactive gambling.
This number does not take into account the licensed totes and bookmakers who are
already in existence and offering online gambling. Thus, since the Commission is
recommending that the online component of these licensed operators be regulated
within the framework of the online gambling legislation, the current limit of 10 should
be increased to cater for this. In addition, the Commission recommends that there
should not be a requirement for the server to hosted in South Africa in line with the
latest international best practice. The concern of the regulator should, however, be
with ensuring the integrity of the system and its ability to be audited at any given
point in time.
The international visits and interactions with regulators highlighted that a major
challenge in the online gambling is the ability of regulators to encourage licensing.
There are few incentives for online operators to become licensed, as the tax
implications are usually substantial and as it is difficult to prevent their access to local
punters. One of the incentives is the ability of licensed operators to advertise their
services. This implies that there needs to be strict enforcement of illegal advertising
by unlicensed operators. The approach taken in Italy was instructive. The regulators
would send messages to punters accessing illegal sites, highlighting to them that
they were about to access an unlicensed site and would therefore not have any
protection from the state. In most instances, punters prefer to gamble on licensed
sites.
Consideration should be given to adopting the pending Italian requirement of
mandatory self-limitations by players, as well as the requirement that upward 184
changes to those limits can only be effected after 7 days. In addition, strict
requirements regarding identity checks should be introduced.
Another important consideration is the question of who regulates online gambling.
Given the opportunities for proliferation and the dangers of uneven regulation in this
area, the Commission is of the view that a single national regulator should have
responsibility for online regulation. That does not mean that provinces should not
have some benefit of the revenues, especially considering the potential for online
gambling to challenge their existing licensees. The Commission therefore
recommends that a revenue-sharing formula is developed and that the revenues are
shared between provincial and national regulators.
The Commission further evaluated where the regulator for online gambling should be
located. A number of options exist.
It is currently proposed that the NGB should be the regulator for interactive gambling,
in addition to the oversight functions over provincial regulators that it currently
exercises. The Commission is of the view that the regulation of online gambling
should be separated from the oversight function over land-based gambling forms.
Online gambling and more traditional land-based forms of gambling will be
competing for market-share over time. Conflicts of interest could arise if one
regulator is responsible for regulating one of the forms of gambling and for exercising
over oversight over regulators responsible for competing forms of gambling.
Furthermore, if both functions reside in one organisation, it is likely that one of the
functions will receive less attention and resources. This has already been apparent in
the NLB, where the administration of the NLDTF overshadows the regulation of the
lottery (and the enforcement of illegal lottery activities). The Commission is therefore
of the view that the NGB should be responsible either for online gambling regulation
or for the oversight function, if that is to be maintained.
As the regulation of the lottery operator is largely systems-based, and the NLB is
responsible for sports pools, the Commission is of the view that the regulation of
online gambling and the regulation of the lottery and sports pools should be
combined in one national regulator. This would create greater efficiency in the
regulatory framework, and allow for the pooling of scarce resources. The NGB
highlighted that the gambling models applied to the lottery and other forms of
gambling are different, in the sense that in the case of the lottery a revenue
maximising approach has been adopted, whereas in the case of other forms of
gambling, a sumptuary approach has been adopted.
The NGB expressed the view that due to these differences, the forms of regulation
should not be combined in one regulator. However, sports pools are currently
regulated by the NLB and should probably not be subject to a revenue maximising
approach. The Commission is of the view that combining the different areas of
regulation will not only promote efficiencies, but also great consistency in the
regulatory framework. Furthermore, sports betting is an area of gambling that is likely
to experience significant growth in future. It has close synergies with online gambling
and sports pools. For this reason, it is imperative that the different areas of regulation
should be combined to prevent potential arbitrage and differences in approach.
Finally, the Commission is of the view that provision would need to be made for
effective enforcement mechanisms, which should include a bigger role for banks.

Don,you missed out pages 166-173...... the pages that made me think somebody had slipped Viagra into my coffee.......lol

here it is...the coffee diluted viagra.

No no no Don ....166 TO 174 not AND!
The best is the bottom of page 172 & the entire173............ ie the conclusions and recomendations re Betting exchanges.

fgs!!! my eyes hurt already!! you referring to this?

6.8.7.8 Competition
International experience suggests that betting exchanges offer competition to
existing sports betting operators, both bookmakers and totalisators. Betting
exchanges have been a driver of innovation in this market. The licensing of betting
exchanges in South Africa would allow for new entry, but presumably there would not
be many betting exchanges seeking to be licensed. Betting exchanges are likely to
put pressure on existing forms of betting.

6.8.8 Recommendation
As with other forms of online gambling, there is existing demand for betting
exchanges. It is a technological innovation in online betting that is currently growing
in popularity internationally and is likely to grow in South Africa as more punters shift
to online betting and gambling.
.
The Commission recommends bringing these activities into the regulatory framework
explicitly. At present, there is no transparency in the regulatory framework. The
criteria of provinces that are licensing operators of similar activities are not clear,
there are no standards and it opens the door for proliferation if regulatory standards
and limits are not clearly set out upfront.
Bringing these activities into the regulatory net and providing punters with a (limited)
choice of licensed operators is likely to provide an outlet for existing demand, will
discourage punters from seeking out unlicensed sites, will maximise punter
protection and generate some tax revenues from these activities.
Betting exchanges are unlikely to stimulate much new demand, as they likely to
appeal to existing clients of either betting or online gambling operators. Much of the
opposition to betting exchanges appears to be derived from concerns by existing
operators that their markets will be put under pressure from competition by betting
exchanges. The Commission is of the view that the fact that betting exchanges would
present competition to existing forms of gambling is not a good reason to oppose
their introduction. The Commission has taken cognisance of the arguments raised by
the horseracing industry in other jurisdictions that the lower contributions by betting
exchanges to levies supporting the industry has a negative impact on the survival of
the industry. The industry must, however, accept that the innovation exists and that
they will need to find new ways to ensure their sustainability.
On the assumption that betting exchanges are unlikely to stimulate much new
demand, the Commission is not greatly concerned that it will result in proliferation,
provided that betting exchanges are regulated in the context of online gambling. It is
recommended that the online regulation makes clear provision for such
intermediaries and sets out the requirements for betting exchanges. The policy
document developed in the United Kingdom, referred to above, could provide
guidance to policymakers and legislators. The particular recommendations of interest
in the policy paper issued by the UK Department of Culture Media and Sport (DCMS)
in April 2003 are outlined below:
1. Betting exchanges would not be able to initiate bets in any way on the
exchange - in that they merely construct a controlled market; and are not a
party to the bet.
2. They may not permit their customers to identify themselves to each other,
either through personal contact or otherwise.
3. They must display and disseminate their betting rules.
4. They must consent to having their play and payment systems checked by
someone authorized by the regulator.
5. They must at all times separate money belonging to punters and their own
operating resources. 174
It is recommended that these requirements be considered for inclusion in the
legislative framework.

Thats it Don,thanks!.....My info,as I posted recently,is that Betfair's application is in ,and on the strength of this recommendation it looks very promising to me!
There was a fair amount of interaction between the commission and Betfair in their investigation,and they were obviously impressed.