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SUBMISSION BY BETFAIR LIMITED

SUBMISSION BY BETFAIR LIMITED. to the Portfolio Committee on Trade & Industry in respect of the National Gambling Amendment Bill, B31 - 2007 22 August 2007. OUTLINE. Introduction Presenters and structure (section 1 of written submission)

Michelle
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SUBMISSION BY BETFAIR LIMITED

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  1. SUBMISSION BY BETFAIR LIMITED to the Portfolio Committee on Trade & Industry in respect of the National Gambling Amendment Bill, B31 - 2007 22 August 2007

  2. OUTLINE • Introduction • Presenters and structure (section 1 of written submission) • Summary of Betfair’s submissions (section 2 of written submission) • Betfair (sections 3 and 4 of the written submission) • Context (section 5 of written submission) • Scope of global regulated interactive gambling • The effect of prohibition • Substantive submissions (section 6 of written submission) • Exclusion of certain activities under the Bill (section 7 of written submission) • Undesirable practical impact of certain provisions and omissions (section 8 of written submission) • Conclusion and Recommendation (section 9 of written submission) • Q&A

  3. INTRODUCTION • Presenters and Structure • Summary of Betfair’s submissions • Betfair and its aspirations in South Africa in the context of the Bill

  4. CONTEXT: SCOPE OF REGULATED GAMBLING ON THE INTERNET UK legal online gambling market in 2006 - ZAR11.5bn Online Casino Online Poker Online fixed odds Exchange Tote, 1% 30% 25% 31% 14% Total P2P = 40% Global legal online gambling market in 2006 - ZAR90.6bn Online sports Online Casino Online Poker ?? betting 33% 25% 42% Total P2P = at least 25% Source: Global Betting and Gaming Consultants 2007 1 GBP: ZAR 14.5

  5. CONTEXT: THE EFFECT OF PROHIBITION Global illegal gambling market in 2006 - ZAR1,117bn China US Other Asia ROW 50% 30% 15% Compared to: SA entire regulated UK entire regulated market – ZAR1.5bn market - ZAR137.8bn Source: Global Betting and Gaming Consultants 2007 1 GBP: ZAR 14.5

  6. SUBSTANTIVE SUBMISSIONS – EXCLUSION OF CERTAIN FORMS • Background to the proposed exclusions • Any exclusion undermines regulatory objectives • No policy basis for the proposed exclusion • The proposed exclusion is discriminatory • If exclusion is justified, it can be circumvented • Parliament should anticipate future regulation of excluded forms

  7. THE REGULATORY EFFECT OF PROPOSED EXCLUSION Online Poker Exchange Online Casino Online fixed odds Player-to-player Tote, 1% 25% 14% Not regulated under Bill = inadequate control = inadequate protection

  8. SUBSTANTIVE SUBMISSIONS – UNDESIRABLE PRACTICAL EFFECTS • Player protections not uniformly imposed on all providers • Bill is not technology neutral: favours existing gambling activities • Onshore server requirement handicaps regulatory objective • Age verification measures are inferior • Specific provisions undermine player retention and sustainability • Specific drafting creates uncertainty

  9. THE COMBINED PRACTICAL EFFECT ON REGULATORY SCOPE Online Poker Exchange Online Casino Online fixed odds Online fixed odds Player-to-player Tote, 1% 25% 14% Outside scope of Bill = inadequate control = inadequate protection

  10. CONCLUSION • Policy framework informing the Bill is both sound and achievable • Current draft of Bill demonstrates a less than comprehensive understanding of both policy and operational issues • Cumulative effect of the proposed exclusion of P2P and shortcomings of the Bill on operational matters impairs the Bill’s ability to achieve its policy objectives • High level solutions proposed by Betfair

  11. RECOMMENDATION The Bill in its current form should be rejected, and sent back to the dti in order to address the policy and practical shortcomings of the current draft

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