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Bitcoing Gambling Laws: South Africa

Aside from its beautiful sun-bathed beaches and rich game, South Africa can be a good destination for gamers. You will meet giant casino operators in the land including Tsogo Sun Holdings Limited and Sun International each offering almost all the popular games to locals and tourists.

Indeed, just like its beaches, South Africa’s casino industry is, by all accounts, considered world-class and has been generating billions of rands for the nation’s economy in form of taxes and levies. Now, officially, land casinos, limited pay-out machines, bingo, and sports (including horse race) betting are all 100% legal in the country.

However, and unsurprisingly, online gambling isn’t, with the exemption of sports, horse race betting, and diverse lotteries. Thus, there are zero authorized South African-based online casinos, poker or bingo websites.

Summary of The Legislative Framework in South Africa

The gambling industry is governed by several laws organized in two tiers. At tier 1, we have the national government set statutes. Then, at tier 2, we have the different provincial laws each controlling gaming operations in its jurisdiction, of course in reference to the national acts.

Among the most prominent nationwide laws are the National Gambling Act (or Act No. 7 of 2004),  and the National Gambling Amendment law (Act No. 10 of 2008). These two set the pace and are the base on which the provinces set their individual legislation.

South Africa has 9 provinces: Western Cape, Northern Cape, Eastern Cape, North West, KwaZulu Natal, Free State, Limpopo, Gauteng, and Mpumalanga.

Each province parades its own charms and attractions for tourists. A similar scenario is replicated in gaming with every province at liberty to craft laws that will best serve the interests of the gamers in their jurisdiction and the society at large.

Some of the well-known provincial gambling acts include Western Cape’s Gambling & Racing Act, (Act No. 4 of 1996), in its amended format, You will also find similar legislation in every other province.

The National Act of 2004 prohibited offering interactive gambling services as well as engaging in interactive gaming (online games). Interestingly, online sports gaming, online horse racing betting, and internet-based bookmaking are lawful, on condition that the provider has the required provincial bookmaker’s license, or is running a properly licensed website (whatever that means!).

It’s worth noting that the country’s 2008 Gambling Amendment Act which was the most daring attempt at legalizing all online betting websites hasn’t been effected. This is largely due to the vehement opposition it faced from interested parties – mainly land-based casinos (terrified of competition) and anti-money laundering bodies. Things took a turn for the worse in 2010 when the North Gauteng’s High Court ruled that delivering online games from remote servers was against the country’s laws.

Fortunately, the regulators have never targeted any individual players and so, many of these gamers are happy to take their passion to various registered online betting platforms such as mBit, which also accepts Bitcoins.

What Does the Government Say about the Bitcoin in South Africa?

At the moment, the digital currency landscape in the country is, largely unregulated.

That being said, the Reserve Bank had in a 2014 virtual currencies (VCs) whitepaper in 2014 outlined its position on crypto saying it doesn’t consider Cryptocurrencies as a legal tender.

So, virtual currencies have neither a legal status nor regulatory framework. Still, the positive bit of this point of view is that South Africa, even though it doesn’t seem to like the Bitcoin hasn’t banned it. Citizens are therefore free to use it even to bet (or otherwise) but at their own risk according to the treasury.

Is There Any Planned Regulation?

Although no timelines have been set, the SARB has mentioned that it’s keeping an eye on the happenings relating to the Bitcoin and cryptos in general and may consider some regulations in the future.

In a related development earlier the bank has this year seemed to change tune and is now referring to digital currencies as  “cyber-tokens”,  apparently because they don’t have enough features to qualify for the title “money”.

“We don’t use (the) term “cryptocurrency” because (it) doesn’t meet (the) requirements of money (in) the (pure)economic sense of (the) stable means of( exchange), (a) unit of measure (and a) stable unit (of) value. We prefer (to use) the word ‘cyber-token’.”

Francois Groepe, Reserve Bank’s Deputy Governor, explaining the bank’s new position.

The Gambling Industry Regulators

Under the South African gaming laws, there are several regulatory bodies with the licensing, supervisory, and enforcement mandate in the nation.

The lead is South Africa’s  National Gambling Board who also participates in policy formulation in collaboration with different state departments. The national gambling policy (2016) is one of their landmark policy works and was the fruit of  a lengthy consultative process involving the department of Trade & industry (DTI) and the Gambling Review Commission (GRC) among other parties. 

South Africa’s  Reserve Bank (SARB), the country’s central bank monitors banks as part of its anti-money laundering mandate while the police, the courts, and other relevant agencies may be called in from time to time. The state parliament also plays a crucial role as all statutes have to be passed here before becoming law.

Like now, Dr. Rob Davies -the minister in charge of trade and industry- has published a notice of his intention to bring a new gambling act amendment bill to parliament.

The bill has given casino operators sleepless nights as it proposes, among other things, the relocations of betting casinos operating in Western Cape. Licensing is mostly left to the provincial gambling boards in the respective territories. Notwithstanding the oversight from the national authorities,  some of the provinces have gone ahead to introduce additional rules to help them tighten the noose on rogue providers.

The Current State of The Gambling Industry in South Africa

Thanks to the fairly reasonable legislative framework, the country boasts of about 40 licensed and regulated land-based casinos (including the luxurious Sun City), and over 450 operational bookmaker outlets. Casinos have operations in all popular metropolitan areas in the country including Johannesburg where you will find Tsogo Sun Montecasino, one of the largest Casinos in the country. According to the National Gambling Board,  there are also an estimated over 440 totalisator outlets.

The South African National Lottery has also for  long been one of the most gambling platforms for South African gamers with its gambling revenue projected to shoot to R2.33 billion by the close of 2019

At the present, Western Cape’s Gambling & Racing Board (WCGRB) is the biggest issuer of online-based bookmaker licenses.

As a result, South Africa residents are able to use these internet betting sites legally not just in the province but also elsewhere.

Many of the international bookmakers not to mention crypto gambling websites such as coinstar are a huge attraction in the South African market.

If, at some point, the government was to reconsider its stand on online betting and may be even go ahead to legalize crypto gambling- like it has been mooted in India-, the industry may experience phenomenal growth.

Wrap-Up

South Africa has some very good beaches and very good games: ) But for the fact that online betting is yet to win over the policymakers, the country can be a super destination for bettors.

The betting community is already ahead of the authorities with most of them an ever-present in various registered internet betting websites. And considering the passion that these players show, coupled with the fact that the omens don’t look too bad for the whole Bitcoin gambling industry in the country, it will take some effort to separate them from their games.

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