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South Africa – Association ‘perplexed’ over new South African casino licence

By - 17 June 2016

South Africa’s Minister of Trade and Industry, Dr Rob Davies has increased the maximum number of casino licences that may be granted in the country from 40 to 41 with the additional licence being allocated to the North West Province.

The Casino Association of South Africa (CASA) has raised serious concerns regarding this development. CASA, which represents all but two of the legal casinos in South Africa, argues that the granting of this new licence without any reasonable justification sets a worrying precedent and creates instability within the industry, while damaging investors’ confidence.

It stated: “When gambling was legalised in South Africa in 1995, the Wiehahn Report on Gambling in South Africa recommended that the maximum number of casino licences available in the country be capped at 40 – a recommendation that was subsequently adopted by government. The number of casino licences per province was also laid down, based on empirical considerations such as the propensity to gamble, economic activity, the population of each province, and other relevant factors.”

“Based purely on the above factors, the North West Province, according to the Wiehahn Report, should only ever have been allocated two casino licences,” it added. “However, due to the fact that the province incorporated the former Bophuthatswana, the North West was already home to no less than seven established casinos. A programme to reduce the number of casinos in the province, as well as the re-demarcation of the North West and Gauteng provincial borders, meant that the number of casinos has since contracted to four, which is still double the Wiehahn Report recommendation.”

Themba Ngobese, Chief Executive Officer of CASA, added: “This, combined with the fact that no new study has been conducted to update the aforementioned empirical considerations as well as the fact that there are still three casino licences available in other provinces, makes the allocation of an additional licence in the province perplexing.”

In a letter to the Minister of Trade and Industry in December 2015, CASA pointed out that the Gambling Review Commission, which was appointed in 2009 by Minister Dr Rob Davies himself to consider whether legalised gambling activities should be expanded or curtailed, had concluded that the limit of 40 casinos was appropriate for the country and should be maintained in the future. In a letter dated 2 March 2016, the Minister countered that the addition of the new licence “is considered special as the North West Province lost the Morula Sun licence as a result of the Gauteng/North West municipal border demarcation process.”

CASA steadfastly resists this argument and believes that the demarcation of provincial boundaries should not have an impact on the overall maximum number of casino licences allocated in the country especially in the absence of empirical data in support of a deviation from the cap contained in the Wiehahn Report (1995) as well as the subsequent Gambling Review Commission Report (2011). CASA further points out that the Morula Sun licence was, in fact, never ‘lost’ – it was merely transposed.

“We are very disappointed with this decision and will be taking this matter forward by seeking legal advice,” said Mr. Ngobese.

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