Online gambling in SA: is it legal?

The National Gambling Amendment Act of 2008, which is said to make provisions for the licensing of online casinos, may only come into force after an appeal to a high court ruling against “interactive gambling” is heard.

Last year a Northern Gauteng High Court ruling made it illegal for online gambling sites such as Piggs Peak and Silver Sands Casino to offer their services in South Africa, even though their servers are hosted outside of the country.

The South African department of trade and industry (DTI) also revealed that penny-auction websites such as Smokoo, Bidchaser, Kooldeals and ViaZiz will soon be considered interactive gambling, making them unable to legally operate in South Africa.

“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,” the DTI told MyBroadband.

If penny-auctions are considered gambling, then it follows that penny-auction sites like Smokoo fall under the same legal axe as Piggs Peak.

“Any form of online/interactive gambling is illegal in South Africa up until the National Gambling Amendment Act of 2008 comes into effect,” the DTI confirmed.

Online gambling not illegal – just not provided for

This National Gambling Amendment Act adds provisions for the granting of licenses to online casinos, explained Lance Michalson of Michalsons Attorneys.

“It is not that online gambling is illegal per se, it is just impossible for someone to get a licence to run a legal online casino,” Michalson said.

According to Michalson the Act was signed into law in 2008 and is just waiting promulgation.

Asked about why the law hadn’t come in force yet, Michalson said he could only wager a guess. “If I had to guess I would suspect the government is waiting for the outcome of the appeal to the Piggs Peak Poker case as this could have a huge effect on how effective the amendment will be.”

On its website, Piggs Peak states that they have been granted leave to appeal the Northern Gauteng High Court ruling in the Bloemfontein High Court to “finalize the legality of online gambling in South Africa.” The date for the start of the proceedings hasn’t been set yet.

Gambling online illegal for SA residents: NGB

Regardless of Piggs Peak’s pending appeal, South Africa’s National Gambling Board said in a press release that online gambling activities may still not legally operate in South Africa.

According to the NGB, South Africans may also not participate in online gambling, or lotteries organised outside the country, without finding themselves on the wrong side of the law.

“Unlicensed operators are encouraged to use readily available technology and block their domains from being accessed in South Africa,” the NGB continued.

“Unlicensed suppliers of online gambling software and related products to operators who target RSA residents are encouraged to cease operations [development, supply, and maintenance of online gambling software] forthwith.”

The NGB went on to threaten online casinos with potentially being “rendered ineligible for licensing when [online gambling] is legalised in South Africa” if they persist in running services targeted at the South African market without being licensed in South Africa.

In addition to the forfeiture of winnings, the NGB warned that “anyone found guilty and liable under the [National Gambling Act No 7 of 2004] shall be fined R10 million or 10 years imprisonment or both.”

The CEO of the NGB said, “We are working together with law enforcement agencies nationally and internationally in order to find a solution that will protect our people against unscrupulous operators.”

“The NGB assures the public that everything will be done to eradicate online gambling as well as related offences.”

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Online gambling in SA: is it legal?