In an exclusive interview with Focus Gaming News, the National Gambling Board of South Africa discusses the growing interest in the African gaming market and the challenges faced by companies.
Exclusive interview.- It is no surprise that the African market has gained prominence in recent years, with more and more companies adjusting their commercial strategies to establish a presence there.
To learn more about this region, Focus Gaming News spoke with the National Gambling Board of South Africa to understand more about their work in the country and their views on the evolution of the industry across the continent.
In recent years, and in particular, at the last ICE, there has been a growing interest from companies in the gaming industry in the African market, why now?
Amanda Musandiwa, acting economic researcher: Increased access to customers: While many African countries still face developmental challenges, increased internet connectivity in recent years means that companies can access customers. Customers that could not be reached before are now accessible to global companies online, particularly through smartphones.
Demand potential due to youthful populations: Africa is a youthful continent, with the majority of its population below the age of 35. This provides a large potential market for entertainment services. Many parts of the world have ageing populations which affects the types of products that will be demanded in future. African countries, on the other hand, will have large markets for consumer goods and services that are aimed at the youth.
Why do you think some companies want to enter the African market but end up choosing not to or failing to do so?
Amanda Musandiwa: Africa is a diverse continent, and companies would first require an appreciation of each country’s laws and cultures. While information is readily available in regulated markets such as South Africa, there may be very little information available for other countries, leading to market uncertainty. The lack of information may act as a deterrent or delay entrance as companies conduct market research.
The long-standing challenges of investing in Africa are likely applicable to gambling companies seeking to enter African markets such as infrastructure challenges and political instability.
For unregulated markets or markets in the process of developing gambling authorities, there may also be uncertainty around future license conditions or tax regimes which may deter entrance.
“Africa is a diverse continent, and companies would first require an appreciation of each country’s laws and cultures.”
Amanda Musandiwa, acting economic researcher at the National Gambling Board of South Africa.
In South Africa, gambling is regulated. Based on your experience, what message would you give to other countries in the region that have not yet followed this path?
Amanda Musandiwa: There are several advantages to regulation including gambling punter protection, tax generation and the achievement of developmental goals.
The South African gambling regulatory authorities contribute to the country’s economic policies to promote company ownership by historically disadvantaged persons, by imposing licensing conditions to this effect. Secondly, laws can be instituted to protect the vulnerable against the harms of gambling.
The regulator maintains control over the number and distribution of gambling opportunities in the country to restrict excessive gambling and the overstimulation of the latent need to gamble which can be detrimental to the socio-economic wellbeing of its population. The regulator is also able to ensure that companies offer fair games.
Given these advantages, it would be beneficial for other countries in the region to regulate their gambling industries. The message to these countries would be to consider the economic goals of the country and employ licensing conditions that promote the countries’ economic agenda.
Countries should also invest in research and understanding punter behaviour so that they can develop laws and regulations that protect the vulnerable. Finally, countries should be prepared to set up organisations to assist those who are harmed by excessive or disordered gambling.
Online gambling is prohibited in South Africa. Are there intentions or discussions about regulating online gambling in the future? What actions have been taken to preserve legal gambling?
Nkoatse Mashamaite, chief compliance officer and Shelton Pagiwa, chief technology officer: Online (Interactive) gambling in South Africa is prohibited until there is legislation lifting the prohibition in terms of section 11 of the National Gambling Act 7 of 2004.
The National Gambling Amendment Act 2008 was passed into law by the President of South Africa, but it awaited the proclamation of the implementation date, which to date has not taken place. The proclamation date was meant to coincide with the implementation date of the Regulations which were not finalised. At the moment only betting operators are legally permitted to take bets through online platforms. Online casino games are not yet permitted.
A Remote Gambling Bill has been introduced in Parliament as a Private Member’s Bill introduced by the official opposition Party (Democratic Alliance).
As Regulators, we are creatures of the statutes, which means we can only implement the approved legislation. We are strengthening regulation strategies to ensure that there is compliance with the gambling legislation across the country.
The National Gambling Board (NGB) continues to strengthen cooperation with the police, other law enforcement agencies, other regulators and all like-minded stakeholders to ensure that there is compliance.
Regulators also perform an advisory role to government on policy gaps identified while implementing the Regulations, and also offer suggestions on how policy gaps can be closed.”
Young people are prohibited from accessing gambling in the country, as well as excluded individuals. How do you handle responsible gambling campaigns?
Lynette Kamineth, communications and stakeholder engagement manager: The National Gambling Act (NGA, 7 of 2004) outlaws gambling for minors (under 18 years of age) due to the deleterious effect on their development. Additionally, the law allows for the protection of gambling-aged citizens by providing mechanisms for them to exclude themselves from gambling activities, or for those who are economically dependent on the gambling punter to seek their exclusion from the courts.
The National Gambling Board (NGB) is furthermore mandated by Section 65(2)(f) of the NGA to “provide a broad-based public education programme about the risks and socio-economic impact of gambling”. This serves to publicise the laws and regulations to citizens, thereby preserving the integrity of South Africa as a responsible global citizen.
To this end, the NGB utilises the findings of a comprehensive, nationwide study on the socio-economic impact of gambling to tailor a national programme of citizen education. The substantial body of research that has been built up by the NGB over the years allows the organisation to strategically identify target audiences and locations where campaigns are run, spanning the length and breadth of the country.
A wide variety of communication tools are utilised, ranging from face-to-face engagement in rural and urban communities to advertising on mainstream and community broadcast and print media, as well as securing mass media interviews on the topics of legal and responsible gambling.
The NGB maximises the reach of its education campaigns by collaborating with like-minded public and private organisations that operate in the socio-economic protection and developmental communications space.
What is the balance of the work done by the National Gambling Board so far and what are your plans for the rest of the year?
Nkoatse Mashamaite and Shelton Pagiwa: The National Gambling Board (NGB) performs its function of conducting oversight over the nine (9) provincial licensing authorities (or provincial gambling boards) to ensure that in their licensing function, they adhere to the national norms and standards set out in the National Gambling Act. The purpose of oversight is to ensure that the socio-economic factors are considered when licensing and monitoring license compliance by gambling operators.
Provinces will continue monitoring the industry to ensure they operate responsibly within the legislation confines. The obligation includes the enforcement against illegal operations to ensure that the revenue generation of the industry is protected and can be maximised. As the NGB, we are directing more effort in assisting the provinces to counter illegal gambling.