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Monday, May 17, 2021

Ngubeni’s Plan To Revolutionise Gambling Industry In Gauteng

STEVEN Ngubeni, the chief executive of the Gauteng Gambling Board [GGB] is quietly planning a gambling revolution by asking government to legalise interactive gambling, move the industry towards full automation and continue to clamp down on illegal gambling by raiding and shutting down illegal sites.

All of this is aimed at increasing the gambling tax revenue that the board collects for the Gauteng province.

Gambling taxes form a critical part of the province’s own revenue collection, alongside motor vehicle licensing fees and other permits.

Since its inception, the Gambling Board has collected over R14 billion in tax revenues and contributed 17,5% to the Gauteng revenue fund in the year to March 2020.

The entity collected just under R1 billion in the year to March 2020, despite the challenges brought by the Covid19 pandemic. Before the pandemic, the revenue in the year to March 2019 stood at R1, 13 billion, which was an increase of 4,4% from the year before.

“Covid was a rude awakening” Ngubeni says “its impact was quite huge, and we felt it as the industry and the regulator”.

During the hard lockdown, gambling tax revenue shrunk by 90% as almost all the segments that the Gabling Board regulates were closed: Casinos, Bingos and Limited Pay out Machines, which are typically found in pubs and similar establishment were closed.

Sports betting, which is the fastest growing segment that the gambling board regulates, continues online albeit with limited sporting activity until major sports, like football resumed.

Ngubeni finds it remarkable that the license holders he has oversight of did not initially retrench, instead getting by with salary reductions, with retrenchments happening late in the lockdown and kept to a minimum.

He believes that with no further hard lockdown, the industry has survived the worst.

Ngubeni now wants government to legalise interactive gambling to minimise the impact of challenges similar to Covid19.

“In South Africa, to participate in a casino game, you have to go to a casino” he says in what sounds like an ancient way of doing things.

Ngubeni says what gets advertised as casino slot machines that can be played is, technically, illegal. He is urging that at the very least, the government can legalise online interactive gambling for exiting license holders.

“Casinos want a combination of foot traffic and online gambling” he says. His only concern with online gambling as a regulator is to curtail excessive and problem gambling, which the organisation conducts in partnership with license holders as well as the South African Responsible Gambling Foundation (SARGF) through public education campaigns and self-exclusion programmes for compulsive gamblers.

Ngubeni is keen to maintain the Gambling Board’s record of five consecutive clean audits under his watch, despite the recent resignation of board members, which prompted Gauteng Economic Development MEC Parks Tau to appoint an administrator to play the role of the board until a new one is appointed. Tau announced earlier this month that he has appointed senior Council Fana Nalane as administrator after the former board was unable to reach a quorum due to a number of resignations during the financial year.

The MEC decided to appoint an administrator as provided for in the Gambling Act to perform the function of the Board.  Tau praised the GGB for achieving its fifth consecutive clean audit- making it one of the few entities to have established such a track record.

Ngubeni second pillar of increasing revenue is to move the industry to full automation for which has been supported by the provincial government through an allocation of between R60 million and R70 million. Business automation will allow the regulator to monitor revenue in real time and invoice an establishment rather than wait for them to declare revenue, which presents the risk of under declaration.

Ngubeni notes his ongoing battle with illegal gambling operators which were also hit hard by the lockdown but have also since mushroomed again. Through specialised training of members of the South African Police Service (SAPS), the police working alongside the GGB’s law enforcement unit regularly raids and closes illegal gambling operations and pursues court challenge where required.

Gauteng has 7 licensed casinos, 11 Bingo operators while the gambling board is in the process of reinstating nine bingo licenses that were either revoked or surrendered by previous holders.

There are about 2000 limited payout machines dotted throughout the province. A reflection of the growth in sports betting is that there are currently 128 bookmakers, and Ngubeni is gearing up for the GGB to license a further 42 Bookmakers.

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