NEWS South Africa bans online, but for how long?
Land-based casinos do well, yet the market isn’t going anywhere
The casinos that dominate South Africa’s $30bn gambling sector are free, for a while, from online interlopers thanks to a new ban on Internet gaming in the country. Wide-ranging rules target not only the operators of
online gaming services, but also individual players, Internet service providers, media that advertise online gambling, and other firms such as banks that handle gaming-related financial transactions. Potential penalties include fines of up to 10m rand ($1.4m), prison sentences of up to ten years, and – perhaps the clincher – exclusion from the licence-application process when the republic does decide to legalise Internet gaming. The ban comes as figures from South Africa’s National
Gambling Board underline the pre-eminence of casinos in its gaming market. In the financial year 2009-10, of the 216bn rand ($31bn) wagered by consumers, a cool 91.2 per cent was taken by casinos. Just 4.7 per cent went to sports and other betting, and
3.2 per cent to what South Africa calls limited payout machines or LPMs – typically found in bars and
restaurants, with prizes capped at 500 rand ($71). Bingo scraped 0.9 per cent. The different sectors’ shares of gross gaming revenue
(GGR), which is the total amount bet minus the amount paid out in prizes, followed much the same pattern, although casinos’ comparatively high rate of return to the player meant their share of GGR was lower than their share of consumer spend, at 84.3 per cent. Conversely, betting’s relatively poor return to the player hiked its share of GGR to just under ten per cent. More than 40 percent of consumer spend was in
Gauteng, the smallestbut most heavily-populated of South Africa’s provinces, containing the cities of Johannesburg and Pretoria. KwaZulu-Natal – the second most populous province, including the city of Durban – and Western Cape, the location of Cape Town, also took large chunks, while others trailed far behind. But while the government’s figures demonstrate the
dominance of casinos, they also illustrate the stagnation besetting the country’s gaming sector. GGR more than doubled between 2001-02 and 2007-08, yet it’s been pretty static since then. Despite this summer’s ban, could online be just what’s needed to breathe life back into South African gambling?
Spain regulates online gaming while Dutch find a compromise
And the European Court alters its stance on protectionism, a bit
Belying their reputation for long summer breaks, Europe’s bureaucrats have been busy. Both the Netherlands and Spain have stepped closer to opening up their online gaming markets, while the European Court of Justice has surprised many in the business by telling Germany and Austria that their gambling laws are unfair. In the Netherlands, the Ministry of Justice’s Online
Gaming Advisory Committee – aka the Commission Jansen – has suggested that the country take a half-step in the direction of liberalisation, by allowing private operators to offer Internet Poker. Currently, the state- owned De Lotto runs the only legal online gaming in the form of sports betting and a lottery, though that’s not deterred the Dutch from playing with foreign operators. The Commission Jansen’s recommendations, however,
still wouldn’t let private firms provide casino games, Bingo or sports betting, a limitation which the Remote Gambling Association (RGA) – representing online operators – believes is designed to appease De Lotto. Said RGA Chief Executive Clive Hawkswood: “If
consumer protection rather than market protectionism is the real policy objective then this recommendation should embrace other areas.” He’d likely prefer the approach of Spain, where new
gambling legislation will regulate casino games and sports betting as well as Poker, online and on mobile phones.
6 OCTOBER 2010 Back in Benelux, meanwhile, the European Court of
Justice (ECOJ) has been raising eyebrows with a couple of rulings that may mark a modest departure from its attitude that EU member states can regulate gambling pretty much any way they please. The ECOJ found that Austria’s exclusion of foreign
companies from casino licences was incompatible with EU law, and wasn’t necessary for crime prevention – Vienna’s stated reason, or perhapsexcuse, for the practice. It also said that the state monopoly on sports betting in Germany was illegal, because it doesn’t apply to casinos and slots. Don’t, however, assume these decisions presage a
sweeping, ECOJ-driven relaxation of gaming laws across Europe. The court adores consistency above all else: and that, rather than a desire to put sports betting in private hands, was almost certainly what lay behind the German ruling, at least. Indeed, the court said: “With a view to channelling the
desire to gamble and the operation of games into a controlled circuit, member states are free to establish public monopolies.” The subtext: “Just do it our way.” The ramifications could, in fact, lead Europe’s gaming
sector in either of two utterly different directions, according to analysts at Media & Entertainment Consulting Network. They say EU states will have to “bring all sectors under tight state control (e.g. via state monopolies) and stop focusing on monetary interests, [or] open up all sectors to private operators – there will likely be no compromise option”. Dutch regulators, please take note.
E-COURSE The Isle of Man’s Department of Economic Development has teamed up with Hamblin Employment Group to offer a three-day course in online gaming for residents hoping to work in the sector. The island is now home to 25 active holders of gaming licences, employing more than 600 people.
FOR SALE, MAYBE Ameristar Casinos, which operates eight locations in the Midwest and southwest of the US, has hired investment bank Lazard to plan a possible sale. It’s said that the publicly-traded firm’s properties are faring better than comparable casinos in gaming hubs like Las Vegas and Atlantic City.
PHEW Slots vendor Aristocrat Leisure returned to the black in the first half, recording a profit of AUD49.3m ($47.8m). In the same period of 2009 it had lost more than AUD30m. It said the US market remained tough but Europe and Asia Pacific – with the exception of Japan, Australia and New Zealand – performed well.
HOLA ELA Booth space is now on sale for ELA, the Mexico City gaming exhibition scheduled for 4-5 May next year.
FILM CLIPSMicrogaming’s new online slot The Lord of the Rings: The Fellowship of the Ring is the first to employ its Cinematic Spins technology, letting players see clips from the movie with every spin.
TICKETY-BOO Video Gaming Technology is to use Nanoptix’s Paycheck 4 TITO printer for VLTs in Illinois.
PROBLEM PILOT British addiction charity Aquarius is leading a pilot project to tackle problem gambling, supported by the Responsible Gambling Fund (RGF). The three-year programme in the West Midlands area will focus on early identification and intervention. Two further problem-gambling pilot programmes will be launched by the RGF later this year.
QUALITY TCSJohnHuxley’s European technical support centre has achieved ISO9001:2008 accreditation.
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