Consumer And Corporate Regulation Division

Presentation to the Portfolio Committee on Trade and Industry01 August 2014

Delegation

• Zodwa Ntuli: Deputy Director General, Consumer and Corporate Regulation

• Prof Linda de Vries: Chairperson, National Gambling Board

• Prof Nevhutanda: Chairperson, National Lotteries Board

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Purpose

To brief members of the Portfolio Committee about the work of Consumer

and Corporate Regulation Division (CCRD) focusing on the Regulated Industries.

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Total Recorded Alcohol Per Capita Consumption: SADC

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Source: WHO (2014)

Minister of Trade and IndustryConsumer and Corporate Regulation Division

Responsibilities: Reducing the socio-economic harm;Promoting development of responsible and sustainable regulated industries;Facilitating entry of new participants and diversity of ownership; andSetting essential national norms and standards.

National Lotteries Board

Established in terms of Section 2 of the Lotteries Act, 57 of 1997.Advises the Minister on the issuing of the licence to conduct the National Lottery;Administers the fund and holds it in trust; monitor and regulates lotteries incidental to exempt entertainment, private lotteries and society lotteries.

National Gambling BoardRetained as established under the National Gambling Act, 1996.Monitors and investigates the issuing of licenses; Maintains the National Gambling Register and monitoring socio-economic

patterns of gambling activity in the Republic.

National Liquor AuthorityA chief directorate within the dti, to which Minister has delegated powers in terms of the Liquor ActRegulates the manufacturing and distribution of liquor, licenses, educate and conducts enforcement in terms of the Liquor Act. The NLA establishes and maintains a register

 

National Liquor Regulators Forum (NLRF) Consists of CD: NLA and heads of provincial liquor boards.a non-statutory forum established to serve as a technical committee to the National Liquor Policy Council (NLPC)

NLPC/National Gambling Policy Council (NGPC)Consists of Minister and MECs responsible for Gambling and/ or Liquor in the 9 provinces

 

NLPC In terms of section 37

Liquor Act, 2003

NGPC In terms of section 61 Gambling Act, 2004

Lotteries

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Lotteries Amendment ActLotteries Policy and Law provides for:

Efficient processing of applications;

For appointment of full time Distributing Agencies;

National Lotteries Board (NLB) to manage NLDTF;

NLB to be the final arbitrator regarding internal disputes resolution where applicant is not happy;

Accountability of Distributing Agencies to both Minister and NLB Board;

Pro Active funding based on informed research;

Limit active participation of conduits;

Removal of Reconstruction and Development Programme

Licensing of Organ Of State to conduct National Lottery

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Future Projects

Education and Awareness for visibility of NLB as it rebrands to implement the amendments.

Implementation of full time adjudication function.

Draft regulations are in the process of being finalised and will be published for public consultation in August 2014.

Appointment of the licence operator for lottery.

Monitor turnaround times for grants.

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NLB

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Achievements

Celebrates 15 years of existence in March 2014

Distributes an average of R2 billion per annum

Has distributed R18 billion to good causes since inception

Today employs 222 employees including interns and

contract workers

In the financial year 2013/14 NLB has distributed R2,030

billion

Currently in a process of managing the process to appoint a

new lottery operator

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NLB’s dual mandate

Regulation

• National Lottery: Operated by Gidani (34% of sales to NLDTF)

• Other lotteries

Distribution• National Lottery Distribution Trust Fund• (NLDTF) Process applications and make

payments• Distributing Agencies adjudicate applications and

make grants in line with criteria

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Misc

     Gidani NLDTF

Art & Culture

RDP

Sport

NGOsCBOs

Charities

REGULATORMonitor activitiesthrough License NLB

Grant Funding

Operates the National Lottery

Weekly

transfer

Applications

28 %45 %

22 %

0 %

5 %

Grant funding

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Grant funding per province

CURRENT ORGANISATIONAL PROJECTS

Third National Lottery Operator (RFP)

The NLB is in advanced stages with the process of appointing the new Lottery Operator.

The Board will be presenting a full report, including a recommendation to the Minister in August 2014.

Verification Process

The NLB has in the past financial year started with the in-depth verification process of projects funded

The exercise has revealed fraudulent activities and non-compliance by beneficiaries

This exercise resulted in to the value of about R250 million being withdrawn

National Indaba 2014

In the 2nd quarter of the financial year 2014/15, NLB will host the Annual National Indaba (September 2014).

All NLB Stakeholders will be Invited including beneficiaries from all Provinces

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LIQUOR

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Liquor Achievements Implementing Liquor Act

Increased inspections

2010 Soccer World Cup Regulations

Liquor Policy Conference hosted in February 2012

2013 African Cup of Nations (AFCON) Liquor Regulations

Regulatory Impact Assessment on the Liquor Act conducted and report produced.

Amendment to the Liquor Regulations 2013

National Liquor Norms and Standards published for public consultation

African Nations Championship Regulations (CHAN 2014) Regulations

Consumer education and awareness campaigns conducted including media campaigns

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Liquor Regulatory framework

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Distribution

Micro manufacturing

the dti

Retail

Liquor Act 59 of 2003

Macro Manufacturing

Prov. Govt.Prov. Acts /89

Future work

Policy Review and legislative amendments to incorporate norms and standards

Enhancing the capacity of the National Liquor Authority to be more efficient – moving towards automation

Participation in the Inter Ministerial Committee (IMC) and implement action plans adopted

Strengthen role and impact of National Liquor Policy Council

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NATIONAL LIQUOR AUTHORITY

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Liquor Act, 2003

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Regulates:

Manufacturing (thresholds applicable) and Distribution (no thresholds applicable) of liquor and methylated spirits

National Liquor Authority Cooperative governance in liquor regulation

Leadership was provided through cooperative governance by coordinating and chairing the National Liquor Regulators Forum [NLRF].

Implementation of Strategy to combat alcohol abuse

Easter Campaign

Youth Month Campaign

Sobriety Week Campaign

Festive Season Campaign

Campaigns were held in all provinces and In total 10500 people were reached directly, 33 million indirectly and 33 radio interviews were conducted

Ensure compliance of registrants to conditions of registration

3500 Inspections conducted and reports produced

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Registrations and Licensing as at March 2013/14

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Registration and Licensing 2013/14 per Authority

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Application Processing

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27.33%

4.42%

62.16%

21.21%

0.25%9.39%

PROFILE OF REGISTRANTS/LICENCES

Manufacturing - 1419

Distribution - 2441

On Consumption - 34353

Off Consumption  - 11722

Manufacturing & Distribution  - 140

On/Off Consumption  - 5192

Compliance Inspections as of 31 march 2014

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In September 2013, NLA in partnership with Limpopo Economic Development closed down five illegal taverns and issued R83 500 fines during a 3 day blitz inspection operation.

The following inspection took place in 2013/2014 financial year.

Gambling

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Gambling Achievements

Gambling Review Commission Report (2010)

Portfolio Committee for Trade and Industry Report on the recommendations of the Gambling Review Commission

Select Committee for Trade and International Relations Report on the recommendations of the Gambling Review Commission

Policy and the Bill are being developed and will be tabled before Cabinet late this year.

Norms and Standards were developed and published for comments - comments are currently being evaluated for finalisation.

Regulations on the Exclusions Register, advertising and re-certification are being finalised.

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TRENDS IN GAMBLING

According to the NGB research, the total value added impact of the gambling sector was R21.9 billion in 2012 representing 0.8% of the GDP of South Africa.

The gambling industry consists of casinos, Bingo, Limited Pay-out Machines, horse racing, sports betting, etc.

A study by PWC compared SA gambling industry to Kenya and Nigeria, the study forecast the gambling outlook from 2013-2017.

Of the three countries in 2012, South Africa had the largest overall gambling market as well as the largest land-based casino gambling market.

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FUTURE WORK

Norms and Standards are being finalised. Policy and Bill will be completed and tabled before Cabinet

later this financial year. Regulations for Interactive Gambling will be prepared in

order to finalise before the end of the current financial year. The implementation of the exclusions register data base will

be finalised within the financial year. the dti and the National Gambling Board will work towards

enhancing partnerships with all partners for efficiency. Education and awareness will be up scaled. Monitoring and evaluation.

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GAMBLING ACTIVITIES Authorised gambling activities are as follows:

Casino gambling.

Horseracing.

Bingo.

Limited payout machines (allows maximum bets of R5.00 and maximum winnings of R500.00).

Interactive gambling (Not yet implemented pending promulgation of the National Gambling Amendment Act, 2008).

Bookmakers (betting on horses and other sporting activities).

New Gambling activities that still require policy intervention:

Electronic Bingo Terminals (said to be evolution of traditional paper bingo game).

Greyhound racing.

Online gambling.

Activities that still require more research work

Fafi

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REVENUE GENERATED

The revenue collected in 2012/2013 amounted to:

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Total revenue R2 095 327 130. Information sourced from the NGB Annual Report 2012/2013

REVENUE GENERATED

The revenue collected per province in 2012/2013 amounted to:

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Total revenue R2 095 327 130. Information sourced from the NGB Annual Report 2012/2013

40%

25%

19%

4%

5%

2%1% 2%

3%

Taxes/Levies contribution per province

Gauteng

KZN

Western Cape

North West

Eastern Cape

Limpopo

Northern Cape

Free State

Mpumalanga

NATIONAL RESPONSIBLE GAMBLING PROGRAMME

The National Responsible Gambling Programme (NRGP) was established in 1999 as a voluntary initiative of the gambling industry to try and curb problem gambling.

The NRGP is led by the South African Responsible Gambling Foundation (SARGF) which has regulators and industry professionals as Trustees.

All gambling sectors, except Lotto, contributes 0.1% of their Gross Gambling Revenue towards funding the operations of the NRGP.

The NRGP offers the following: Public awareness Training Counseling treatment for problem gamblers using a toll free number

(0800 006 008) accessible by all people with gambling challenges regardless of the mode of gambling.

Research School curriculum about gambling dangers and the entire gambling

industry. In 2013 the contributions amounted to R17 366 559.00.

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NATIONAL RESPONSIBLE GAMBLING PROGRAMME

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Problem gambling calls above indicate a total of 1761 call received in 2011/2012 financial year and in 2012/2013 financial year 1856 calls were received.

COURT CASES

Akani Egoli (Pty) Ltd vs Gauteng Gambling Board and Others The matter was a challenge to the Gauteng Gambling Board

on the roll-out of Electronic Bingo Terminals (EBTs). The court found that the EBTs are just slot machines that

should not have been rolled-out outside of casinos.

Casino Enterprises v The Gauteng Gambling Board (653/10) [2011]ZASCA 155

The court ruled that online gambling is illegal in South Africa and that anyone offering it for play in South Africa is acting illegally.

Gambling in this case will be happening where punter or gambler is located regardless of the location for the server.

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Conclusion

Thank You

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