Emerging markets & culture
increasing of excise duty from 7.5% to 20% for betting or gambling wagers, as well as for prize competitions and lotteries, with the exception of charitable lotteries. Further to this, a new 15% fee for all gambling advertisements charged by all television stations, print media, billboards, and radio stations for advertisements was also included in the Finance Bill 2022. Having considered the outlook of proposed legislative reform in South Africa and other African jurisdictions, regulators are often confronted with the criticism that legislative development does not keep up with technological advancement and thus certain legislation is deemed to be outdated or does not provide for innovation. Gambling regulation seeks to regulate the licensee, the gambling activity and the negative impact to the gambler amongst others. The purpose of technical standards would support an argument as to why legislation should remain technologically neutral. If the development of technical standards is accommodated in a jurisdiction’s legislative framework then technological advancement and innovation can be incorporated in the licensing regime. New gambling products, machines and devices can be introduced into the market without a need for continuous legislative amendment. TECH TACTICS Africa has been all about retail and brick and mortar, however the recent rapid spread of mobile technology points the direction for the future. Technology is enabling regulators to install monitoring systems to track gambling transactions, reduce leakage of taxation and implement consumer protections. In South Africa currently, a National Central Electronic Monitoring System exists to monitor the limited pay-out machine industry. However, there is an opportunity for the regulator to extend the system to other
modes of gambling. The Ghana Revenue Authority (GRA) introduction of a new digital way to collect taxes from the gambling industry to prevent leakage, since April 1, 2022. Uganda seeks to create National Central Electronic Monitoring System to prevent operators from evading tax. The creation of a central monitoring system in Nigeria also includes changes that would improve taxation and clamp down on unlicensed operators. The opportunity to implement Electronic Monitoring Systems, paves the way for the establishment of player accounts which advances the know your customer (KYC) and responsible gambling principles. Further benefits would be the tracking of financial transactions which would result in increased state revenues from gambling businesses, a better understanding of the size of the industry, improved anti-money laundering procedures, and increased enforcement efforts against licensees that breach their licence requirements. CONCLUSIONS There are still risks of doing business in Africa whether these be legal, regulatory, financial, political or economic. There are also emerging social risks as rapid technological advances mean a shift in the profile of many punters. The instant gratification which tech enables means that an increasing number of youth are participating in gambling-related activities without considering the potential problems attributable to compulsive and addictive gambling. Africa certainly represents huge potential, and that potential gets closer to being realized as each year passes. Those tempted to take the plunge may find that approaches which have worked elsewhere need to be adapted. But the market entry challenges have a flipside in terms of the competitive environment. If it was easy everyone would be doing it.
Caroline Kongwa is Chief Strategic Advisor to The National Gambling
Board, South Africa. ckongwa@ngb.org.za
12 • IMGL Magazine • November 2022
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