Pretoria High Court judge Willie Hartzenberg this week granted the Gauteng Gambling Board (GGB) a declaratory order banning online gambling in the South African province.
Hartzenberg ruled against Casino Enterprises of Swaziland (CES), which submitted an application to offer online gambling services to Guateng residents.
CES argued that although residents gambled from their homes in Guateng, gambling transactions were processed in Swaziland, a small country landlocked by South Africa. CES alleged thereby that it was not in contravention of the Guateng Gambling Act.
The GGB, on the other hand, argued that CES was not licensed to operate in South Africa.
Hartzenberg ruled in favor of the GGB, noting twofold:
(i) "In terms of section 15(1) of the National Gambling 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 . . . "
(ii) "In terms of section 71(1) of the Gauteng Gambling Act, nobody is allowed to advertise or disseminate any information relating to gambling in Gauteng in respect of which no license was issued."
Hartzenberg also noted that CES's Swaziland licensure did not sanction it to operate extra-territorially--that is, in South Africa.
"It is difficult to see why . . . actions of [CES] within the borders of the Republic are sanctioned by the Swaziland license," he said.
The GGB afterwards hailed the court's decision as "groundbreaking." The Board issued a statement, which threatened gamblers, banks and Internet providers who advertised or facilitated online gambling with stiff penalties: up to $1.3 million in fines; up to 10 years behind bars; or both.
How Far Does the Ruling Reach?
While the ruling seems clear with regard to online gambling in Gauteng, its position elsewhere is less clear, said lawyer Lance Michalson, who specializes in information and communication technology law.
"The judgment does not go so far as to say online gambling in the whole of South Africa is illegal," Michalson said. "It only says online gambling in Gauteng is illegal unless the casino obtains a licence from the Gauteng Gambling Board.
"Remember that each of the nine provinces have their own Acts in terms of which each provincial licensing authority has exclusive jurisdiction within its province to issue provincial licenses in respect of casinos, gambling, etc.
"Only the Western Cape and Eastern Cape Acts deal explicitly with the concept of online, interactive or Internet gambling. There is currently no certainty with regard to the applicability of the remaining Provincial Acts to Internet gambling. That uncertainty remains, as does the status of online gambling in the other provinces which don't have provincial legislation."
From another Perspective
Internet Service Providers' Assciation (ISPA) regulatory advisor Michael Silber said that the GGB may have issued too broad a threat. Silber claims there is no law that requires ISPs to block--or otherwise restrict--access to online gambling.
"To date, there has been no court judgment requiring ISPs to do so," he said. "In fact, the Electronic Communications and Transactions Act specifically states there is no general obligation on an ISP to monitor the data which it transmits or stores, or to actively seeks facts or circumstances indicating an unlawful activity.
"As such, and until a court judgment or law states otherwise, there will not be any significant effect on ISPs," he added.
With regard to advertising, Silber said online casinos, international lotteries and other Net gambling operators have, to date, advertised with impunity.
However, the National Gambling Act stipulates that ". . . a person must not advertise or promote . . . any gambling activity . . . that is unlawful in terms of this Act or applicable provincial law."
Likewise, the Gauteng Gambling Act stipulates that ". . . no person shall, by way of advertisement or with intent to advertise, publish or otherwise disseminate or distribute any information concerning gambling in the province in respect of which a license in terms of this Act is no in force."
Silber noted that it is unclear whether these sections only prohibit the advertiser from placing advertisements, or if they cover both the advertiser and the advertising media (radio, print, television or Internet).
"ISPA's view is that this provision of the National and Gauteng Gambling Acts must be interpreted restrictively, so as only to apply to the person or entity placing the advertising," he said. "Nevertheless, some more cautious media organizations may choose to decline advertising for online gambling in the media under their control. There are a few ISPs that host an information portal for their subscribers and they may choose to decline future advertising of this nature from such a portal. ISPs cannot force their customers to remove such advertising from the customer's Web site without a court order."