Gaming Regulators Africa Forum

1. Gaming Regulators Africa Forum Alternative Dispute Mechanism Linked to Regulatory Matters and Responsibilities Presented by : Mr. Mxolisi Zwane – Chairperson GGB

2. Agenda • Background and Objectives • Problem Statement • Administrative Responsibilities of Regulators • Legislative Mandate • Current Litigation examples • Examples of (A)lternate (D)ispute (R)esolution • Benefits/Criticism of ADR • Way forward • End

3. Background and Objectives • As with most jurisdictions in Africa, gambling has been legalised and seen a medium for revenue generation for our respective governments. • While we consider revenue generation let us unpack some of the other objectives we would need to consider: • Licensing and Regulation • Enforcement and Monitoring • Transformation imperatives • Eradication of illegal gambling

4. Problem Statement • In 1996, the democratic government of South Africa decided to legalise all forms of gambling, subject to strict regulation and control and this environment has matured and continues to evolve. • Given these advancements in the industry, interests are high and often collide with the intention of the law that leads this industry to become highly litigious. • Regulatory decisions are challenged, gambling related disputes are complex due to limited gambling knowledge of our judiciary and our court process is cumbersome and costly.

5. Administrative Responsibility of Regulators • Regulators are administrative bodies and perform necessary actions in exercising state authority. • The Constitution of Republic of South Africa,1996 impose a duty on all administrators to exercise public power lawfully and provide necessary reasons for decisions taken. • The actions of the administrative bodies (Regulators) are therefore reviewable on either substantive or procedural fairness.

6. Legislative Mandate • All gambling Board (Regulators) have passed legislation to regulate gambling in their respective provinces. • Whenever there are disputes between the Regulator and their stakeholder, the courts are the first instance where the aggrieved party may refer the matter for resolutions. • Section 34 of the Constitution of the Republic South Africa, 1996 provides the right to have disputes resolved by means of public hearing before a court, alternatively, where appropriate, by means of an independent, impartial forum.

7. Legislative Mandate… • It is common cause that the court process are cumbersome and costly and therefore Alternative Dispute Resolution (“ADR”) is the solution to quicker resolution of gambling disputes. • Save for the North West Gambling Act, the provincial gambling (including National Gambling Act) legislation do not provide for a speedy dispute resolution mechanism.

8. Legislative Mandate… • As mentioned above, save for the North West Gambling Act of 2001, the provincial gambling legislations do not provide for a speedy dispute resolution mechanism. • In terms of section 90 of the North West Gambling Act, the decision or proceedings of the Board may be reviewed by a Review Tribunal if the aggrieved party refers the matter as such within 30 days after receiving the reason for the decision.

9. Legislative Mandate… The Review Tribunal panel consists of three members appointed by Member of the Executive Council. The panel consists of: • An Advocate or retired Judge who will be the presiding officer • A designated staff member of the National Gambling Board • Any other member who has business acumen or is suitable to be appointed as member of the tribunal

10. Legislative Mandate.. • The Tribunal has 14 days to deliver the outcome after hearing the dispute. • The turnaround time from referring the matter to the Tribunal to its completion is not more than 3 months. • The fact that the dispute may be resolved within a shorter period of time, the cost associated is way less than the cost of referring the matter to court.

11. Current Litigation examples These are some of the examples of cases that went to court and could have easily resolved through ADR mechanism: • National Lotteries Commission and others vs Mpumalanga Gambling Board and Lottostar (Pty) Ltd. • The applicant launched the declaratory order application during October 2016 and the matter was only finalized during May 2019. • The key issues for determination was whether the bookmaker licenced by the Mpumalanga Gambling Board authorise Lottostar and Betting World to accept bets on the outcome of lotteries.

12. Current Litigation examples… • The court heard the matter and decided to refer it back to be resolved in term of the Intergovernmental Relation Framework Act 2005 after more than two years. • The parties must now start a new process of resolving their disputes while incurring more cost. • Had the matter being referred to an Alternate Dispute Resolution (ADR), it would have been resolved within 3 months or so.

13. Current Litigation examples • Viva Bet (Pty) Ltd vs Gauteng Gambling Board. • During May 2017 Vivabet launched a court application to review and set aside the Board decision not to approve its Bookmaker applications to operate bookmaking business. • Two years later the matter is before the Supreme Court of Appeal and it has not yet been set down for hearing. • The combined cost to date in this regard is estimated at over 5 million rand. • Had the matter been referred to ADR, it would have been resolved within 3 months or so with a significantly lower cost to the parties.

14. Examples of (A)lternate (D)ispute (R)esolution These are some of the industries that have adopted ADR mechanism • Construction industry Due to the fact that infrastructure and construction disputes take a long time the construction industry, affiliated with the Arbitration Foundation of Southern Africa (“AFSA”), has the following in order to obtain speedy resolutions at a reduced cost: • The parties are able to choose from trustworthy experts in a particular field. • The parties of different nationalities and jurisdictions can choose a convenient and neutral location to meet their particular needs for necessary engagement.

15. Examples of (A)lternate (D)ispute (R)esolution • Commission for Conciliation, Mediation and Arbitration • Arbitration is a process initiated at the consent by all parties concerned and is therefore a voluntary process. • The Former Industrial Court was replaced by the Commission for Conciliation, Mediation and Arbitration (CCMA) and this was a paradigm shift from the adversarial model to the one based on promoting greater co-operation amongst business, labour and government. • Unlike other ADR processes, in labour related matters, the Labour Relation Act prescribes that dispute resolution commence in the CCMA.

16. Examples of (A)lternate (D)ispute (R)esolution • China-Africa Joint Arbitration Centre (“CAJAC”) • China is Africa’s largest trading partner and foreign disputants were unwilling to submit their disputes to courts and preferred rather, to submit such disputes to arbitration for speed, neutrality, confidentiality and flexibility. • Therefore, the Chinese and African stakeholders, including their legal communities, established CAJAC as a mechanism to resolve their cross-border disputes effectively and efficiently.

17. Benefits/Criticism of ADR • There are many reasons that make the ADR desirable and suitable as a dispute settlement approach, including the facilitation of access to justice and reduction of costs. • Moreover, unlike the judges in court proceedings, the adjudicators in the ADR are specialist in the field of the dispute, accordingly the decisions by the Arbitrators will be convincing.

18. Benefits/Criticism of ADR • There’s a dissenting view that ADR does not have more advantages than the litigation process in practice, particularly in complex commercial disputes i.e. the construction industry. The basis of the view is that such arbitrations are unnecessary delayed by unreasonable arbitrators, and are therefore costly • The South African Law Commission in their May 2001 report conducted a study that recommends that the Tribunal adopt procedures which are fair with certain timelines to avoid the unnecessary delay.

19. Way forward • In view of the nature of the complexity of the gambling disputes apposite and unique, ADR mechanisms are indispensable for resolving gambling disputes speedily, proficiently and effectively. • ADR may be in the form of: • Mediation and Conciliation • Adjudication • Arbitration (in term of Arbitration Act of 1965 and also the International Arbitration Act of 2017)

20. Way forward • Globally, ADR is recognized as an important mechanism of resolving complex commercial and other disputes which can relieve the pressure on the courts. • Over time, International arbitration has developed as a practical, efficient and established method of settling disputes without resorting to going to courts • It is mentioned in the problem statement that the gambling industry is a highly litigious industry and it is highly complex and therefore an Arbitrator with gambling experience will produce substantive outcome within a reasonable period of time.

21. Way forward • There is extensive growth in the interactive sector and this stems from internet penetration made possible via computers, mobile phones etc. The ADR mechanism may be a good system to assist in resolving interactive gambling and cross border transactions should the government resolve to regulate it.

22. Way forward • The ADR system and the creation of such is envisaged to assist not only a single regulator but rather all gambling regulators in South Africa and Africa. (particularly GRAF members) All regulators are constantly affected by the issue of litigation and long drawn out resolution processes through our current judicial system • It is envisaged that as we look to introduce such an ADR for the benefit of all regulators in Africa that we consider the following as GRAF: • The adopting of a steering committee • Investigation into the creation of an Independent Tribunal for the gambling Industry • Development of applicable Constitution and Rules • Development of an applicable Procedure manual • Derive a necessary training manual • Consider a suitable funding model that will allow for such tribunal to be self sustainable.

23. THANK YOU Questions?