South Africa Begins Seizing Account Funds from Online Gamblers

Less than a year after introducing strict new measures designed to curtail illicit online gambling, authorities in South Africa have initiated seizures of player fund accounts.

On May 25, in a case described by the Department of Trade and Industry as “unprecedented,” the South African government announced that it had confiscated approximately 1.25 million in the country’s Rand currency (USD$97,778) from “several illegal gamblers.”

Despite the presence of major online casinos like Springbok Casino, which utilizes the .za top-level domain assigned to South Africa, the country prohibits online casino games, slot parlors, and poker rooms. Sports betting via the internet is permissible, but only through a handful of licensed platforms operated in conjunction with the state, leaving South African iGaming enthusiasts with few options outside of offshore operators.

Recognizing that South Africans were undoubtedly still engaged in online gambling despite the law, the DTI published a draft document in September of last year, providing the framework for a legislative package known as the National Gambling Amendment Bill.

The bill sought to adjust several components of the National Gambling Act of 2004, including the removal of a provision requiring the DTI to request permission from the country’s High Court before seizing online gambling accounts.

As of today, that bill has yet to be officially signed into law, but in April of 2016 the DTI published a new National Gambling Policy. This document stated unequivocally that both players and operators would be subject to penalty if found guilty of gambling online:

“No new forms of gambling will be allowed at this point (and) improved provisions will be included in legislation to deal effectively with illegal gambling.

The capacity to regulate online gambling currently is not adequate, but can be streamlined to prevent illegal operations. Provisions must be included to prohibit illegal winnings, with amendments to prohibit internet service providers (who must not knowingly host an illegal gambling site), banks and other payment facilitators from facilitating illegal gambling by transferring, paying or facilitating payment of illegal winnings to persons in South Africa.”

As of now, the identities of the gamblers snared by the DTI dragnet have not been revealed, but the agency was quick to point out that anybody gambling online could be subject to similar consequences.

In a statement announcing the seizures, the DTI cited prior warnings delivered by the agency’s leading figure:

“The Minister of Trade and Industry, Dr. Rob Davies, has previously cautioned that online gambling is illegal and if South African citizens participate in online gambling and they win, their winnings are the proceeds of an illegal activity and they will therefore be confiscated and forfeited to the state.

Minister Davies has also expressed concern that online gambling could be utilised to launder money. It is on this basis that the banks continue to collaborate with the National Gambling Board to confiscate the unlawful winnings.”

Caroline Kongwa, who serves as accounting authority for the National Gaming Board (NGB), issued a statement of her own. While strongly urging South Africans to abstain from online gambling, Kongwa also cited the increased willingness of the High Court to authorize similar seizures:

“The public is hereby cautioned to be wary of online gambling offerings. Online gambling is illegal and thus anyone participating in any illegal online gambling activity would be unable to receive any winnings and would expose themselves to criminal prosecution.

The NGB is encouraged by the judiciary system in considering gambling related matters and in a related matter, the High Court of South Africa, Gauteng Division, granted a court judgement in favour of a licenced gambling operator prohibiting an illegal gambling operator from offering illegal online gambling.”

According to Kongwa, anybody deemed to be guilty of gambling online, or facilitating such crimes through internet caf├ęs and other venues, will be subject to criminal charges and fines up to R10 million (USD$781,348).